Alternate remittance systems in Ghana: a trade enabler or an organised fraud
| DOI | https://doi.org/10.1108/JMLC-09-2021-0099 |
| Published date | 18 November 2021 |
| Date | 18 November 2021 |
| Pages | 35-49 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Alexander Asmah,Williams Abayaawien Atuilik |
Alternate remittance systems in
Ghana: a trade enabler or an
organised fraud
Alexander Asmah
Department of Business Technology and Innovation,
Heritage Christian University College, Accra, Ghana, and
Williams Abayaawien Atuilik
Department of Accounting and Finance, Heritage Christian University College,
Accra, Ghana
Abstract
Purpose –Alternate remittance systems (ARS) are inherently not illegal; however, the nature of their
activities has mostly been linked with money laundering and terrorist financing, which raises several
questions as to why businesses in Ghana rely on these systems to conduct their cross-border trade. The
purpose of this study is seeks to understandthe nature of ARS in Ghana and analyse why business owners
rely on themfor their transactions.
Design/methodology/approach –Three companies were selected for the case study analysis. This
research paper used a qualitativedata analysis for the study. Interviews, direct participantobservation and
documentary reviewwere the main techniques for data collection. The multiplesources of evidence helped to
reduce the potentialbias of the single method.
Findings –This paper found that some businesses using the system in Ghana can acquire unsecured
loans at little or no interest cost, which provides a good source of funding to support business growth.
Unlike other studies, this study proves that in some instances, ARS operators transact business with the
clients they do not, particularly trust. Within the context of this study, this paper found evidence that
supports money laundering, but the underlining crime is mostly tax evasion. The adoption of the
system is an attempt to disguise the proceeds of the tax evasion crime and clean them through business
operations.
Research limitations/implications –This analysis was based on the strain theory from the
perspective of the clients. Future studies can focus attention on the ARS operators and understand their
perspectives.Several other fraud theories could be used as a lens to understandthe phenomena in Ghana and
other jurisdictions.
Practical implications –The study throws more light on a “secret”or an undergroundbanking system
that operates in Ghana. It provides insights that can guide regulatory authorities in their policy
implementation.The need for stricter enforcement of the law has also been highlighted.
Originality/value –To the best of the authors’knowledge,this study is original, as it focuses on a sector
that is highly secretivebut has significant implications on the Ghanaian economy.
Keywords Banking, Alternate remittance system
Paper type Research paper
1. Introduction
In a globalised business environment, as we have it in the current world order, itis a regular
practice for businesses to engage with other businesses beyond the territorial borders of
their countries of domicile. This requires that business entities conduct extra due diligence
Alternate
remittance
systems in
Ghana
35
Journalof Money Laundering
Control
Vol.26 No. 1, 2023
pp. 35-49
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-09-2021-0099
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