Ghana targets GHS 98 billion diaspora funds with securitisation

Ghana plans to attract long-term funding from its diaspora by focusing on structured financial instruments rather than simple retail bonds. This strategy aims to convert rising overseas transfers, known as remittances, into a more reliable source of investment capital.

Policymakers intend to package remittance inflows and back them with guarantees. This approach seeks to address persistent concerns about trust, data, and regulation among potential investors. The Bank of Ghana (BoG) highlights diaspora bonds as a key part of diversifying funding sources after Ghana's recent debt restructuring.

The Governor of the Bank of Ghana, Dr. Johnson Pandit Asiama, emphasized the large inflows available for this initiative. Remittances increased to nearly US$7.8 billion in 2025 from US$6.65 billion in 2024. The 2025 figure is roughly four times the US$1.73 billion in foreign direct investments (FDI) received that same year. This amount was equivalent to about 6 percent of Ghana's Gross Domestic Product (GDP).

Dr. Asiama stated at a diaspora engagement event that remittance inflows remain a cornerstone of Ghana’s external sector. The current goal is to redirect these funds from consumption towards long-term investment. This includes funding infrastructure projects, small businesses, and financial assets.

Banking and corporate governance consultant Dr. Richmond Atuahene suggests deploying more sophisticated financing structures. He advocates for securitisation of remittance flows and the use of external guarantees. These measures would improve credit quality and reduce borrowing costs for Ghana.

Dr. Atuahene believes securitisation is essential to unlocking diaspora demand. By packaging predictable foreign-currency inflows, like remittances, export earnings, or tourism receipts, into bond structures, Ghana could create lower-risk instruments. These instruments would be more attractive than conventional government debt.

Such structures, often issued through special companies called special purpose vehicles, allow repayments directly from offshore inflows. This protects investors from domestic financial risks. Countries like Brazil and Turkey have used this approach to achieve better borrowing terms than their credit ratings would typically allow.

For Ghana, this could open access to larger sums of capital at lower costs. It would also ease investor worries about repayment reliability. Alongside securitisation, guarantees from international organizations are crucial for restoring confidence after Ghana's recent debt restructuring.

Dr. Atuahene points to institutions like the Multilateral Investment Guarantee Agency (MIGA) and the African Export-Import Bank. These organizations could provide risk protection and technical support. He said these measures are essential to rebuilding confidence, noting that diaspora investors expect safeguards similar to international investors, despite their national ties.

The confidence problem stems directly from the Domestic Debt Exchange Programme (DDEP), launched in December 2022. This program caused estimated net present value losses of GHS 87.5 billion for local bondholders. Individual investors lost between 30 and 50 percent of their investment value when high-interest bonds were swapped for bonds with initial rates as low as zero percent.

The losses from the DDEP significantly impact any new government debt instrument, whether for domestic or diaspora investors. The central bank is exploring foreign-currency-denominated investment products and structured vehicles in partnership with state agencies. It is also reviewing regulations for cross-border financial flows.

The central bank is also promoting digital channels to improve the efficiency and tracking of remittances and investment transactions. Dr. Asiama noted that authorities are working to ensure investment pathways for diaspora participants are smooth, credible, and rewarding. This includes partnerships with financial technology (fintech) firms and using digital ledger technologies under regulatory supervision.

However, structural challenges remain. Dr. Atuahene identifies gaps in diaspora data as a significant barrier to successful bond issuance. Without detailed information on diaspora populations, income levels, and investment preferences, bond structures might be poorly targeted, limiting investment. Improved data would allow authorities to design investment products and communication strategies better suited to their audience.