Illegal Money Transfer Booms

DESPITE CLAIMS by the Bank of Ghana that it has a regime that regulates money transmission services in Ghana, illegal money transfer is fast spreading covertly in the country.

The operators of these illegal services, instead of registering their organizations with the Registrar-General’s Department and the Bank of Ghana, to enjoy recognition and be offered licences to undertake their operations, have chosen to operate outside traceable offices.

They gallivant from office to office, house to house and other accessible locations where their services are in demand.

One of such instances which DAILY GUIDE specifically investigated involved a company by name Nana’s Artifacts based in Amsterdam, Holland.

The contact agent in Ghana is one Wofa K, a cabbie with no address. As soon as he was called last Tuesday afternoon, he arrived at the agreed location in no time and exchanged €100 Euros for GH¢211. The transaction went on without the cabbie asking for any form of identification of the customer. There was also no issuance of a receipt to cover the transaction.

This and many more of such illegal transactions are more pronounced currently as a result of the Christmas festivities. A lot of Ghanaians in the Diaspora are remitting their family members, friends and spouses through such unregistered routes.

It would be recalled that quite recently, the media and a few civil society organizations raised concern over the trend, but these were counteracted by the Bank of Ghana through a press release.

The system involves the licensing of banks and approval of partnerships between banks and money remittance companies such as Western Union Money Transfer, Vigo, and Moneygram. Apart from the banks, the Bank of Ghana has also licensed a number of non-bank financial institutions which are authorized to deal in money remittance business.

“The Bank of Ghana is aware that some remittances into Ghana may be coming through informal sources such as through personal couriers, but it is not aware that the scale is that massive or that such remittances are laundered money, which is the impression the research findings seems to create. The Bank of Ghana receives regular information from the banks and remittance companies on their activities and pays supervisory visits to these institutions periodically.

"Data from the banks and the money transfer companies indicate a steady growth in inward remittances,” it said in the statement.

Identifying that remittances included transfers to NGOs, embassies, service providers and individuals, BoG, in the reaction, noted: “Between January and May 2011, remittances that came through the banking system reached US$7.1 billion (from US$4.2 million a year before), of which $745 million accrued to individuals.”

The reaction was made after Nana Attobrah Quaicoe, Head of Research at the Danquah Institute, had urged the Bank of Ghana, the country’s financial regulatory authority, to consider allowing formal Money Transfer Operators (MTOs) to transmit money out of Ghana as a solution to the growing menace of illegal money transfer operations.

“Government’s fight against money laundering and illegal money transfer activities will only remain a lip service if immediate steps are not put in place to clamp down on underground structures that allow inward and outward movement of funds through unapproved routes,” he said.