How a proposed U.S. remittance fee could affect Ghanaians and other immigrants

A new legislative proposal in the United States, the Border Security Investment Act (H.R. 445), is raising concerns among immigrant communities and in countries heavily reliant on remittances.

The bill, introduced in the House of Representatives, aims to bolster border security by imposing a substantial fee on money sent home by immigrants.

If enacted, this proposal could have far-reaching consequences for individuals in the U.S. and the economies of several nations, including Ghana.

The core of the Border Security Investment Act is a proposed 37% fee on remittances processed through money services businesses. This fee would apply to money sent to the top five countries whose citizens or nationals recorded the highest number of unlawful entries into the United States during the previous fiscal year, as determined by U.S. Customs and Border Protection (CBP).

Crucially, the bill does not explicitly name these five countries. Instead, it mandates that CBP will annually identify these nations based on the most current data on unlawful entries. This means the list of affected countries is subject to change each year, reflecting evolving migration patterns and enforcement data. Individuals and businesses involved in sending or receiving remittances will need to regularly monitor CBP’s annual reports to stay informed about which countries are subject to the fee.

Sponsored by Rep. Nathaniel Moran and co-sponsored by six other Republican representatives, the bill’s objective is to generate funds for border security initiatives. It is distinct from previous proposals, such as the 2022 WIRED Act, which suggested a 5% fee for similar purposes. The Border Security Investment Act proposes a significantly higher fee and targets a potentially broader range of countries based on the defined criteria.

For African dependents who rely on financial support from relatives in the United States, the implications of this bill could be substantial. While the affected countries are not fixed, historical data and recent CBP statistics indicate that nationals from several African nations have been encountered at the U.S. southern border. A recent Business Insider Africa report on U.S. immigration deportation lists for 2024 and the U.S. ICE Annual Report for the same year also show a significant number of removals involving citizens from various African countries. This makes it likely that some African nations could fall within the top five countries targeted by the fee.

If an African country, including Ghana, is included in this list, the proposed 37% fee on remittances could severely impact the financial support many families depend on for essential needs such as food, education, healthcare, and housing. With remittances playing a vital role in many African economies, contributing significantly to their GDP (Africa received $100 billion in remittances in 2023, about 6% of its GDP), countries like Nigeria, Egypt, Morocco, Kenya, and Ghana could face considerable financial strain if the bill passes.

Supporters of the proposed fee argue it is a necessary measure to fund efforts to control illegal immigration.

However, opponents contend that it unfairly burdens legal residents sending money home and does not address the underlying causes of migration, such as poverty and violence. The potential economic hardship on low-income households in remittance-dependent nations remains a significant concern for those opposing the bill.

 

Credit: Business Insider Africa

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