The Impact of Mobile Money Use on Internal Remittance and Household Food Insecurity in Ghana

Abstract

Food insecurity is a worldwide security threat that requires attention from the global community. Although the world’s production of food is high, every night, 690 million people go to bed on empty stomach. As of 2019, 135 million people in 55 countries were affected by food insecurity. In developing and emerging economies like Ghana, the issue of food insecurity is high, most especially in the Northern and rural parts of the country. One major challenge people living in these parts of the country face is the accessibility to formal financial institutions. Access to funds is believed to propel growth and development in human capital. The growth of the telecommunication network has led to new products and services being innovated. A perfect example is the mobile money (MM) technology. From the Ghana Living Standard Survey 7 (GLSS 7), internal remittance received by households is mostly via MM transfer. Amongst the means through which households receive remittances, thus Post office, Commercial Bank, Agents Service, Family relation, sent through a traveler or MM transfer, MM transfer accounts for about 61% of it. From the GLSS 7, households use about 81% of total internal remittance received mainly for consumption. The focus of the study is to investigate the impact MM usage has on household food insecurity and internal remittance received. The propensity score matching (PSM) technique is employed to examine the impact household adoption of MM usage has on their food insecurity and internal remittance received among non-poor and poor households. The results show that the food insecurity of the poor household is reduced by 0.431 index point and internal remittance is increased by GH₵ 168.99. The non-poor on the other hand experience a reduction in food insecurity by 0.109 index points and a decrease in the internal remittances by GH₵ 1.633. From the results, we can tell that the use of the mobile money technology reduces food insecurity and increases internal remittances amongst households in Ghana. But the poor households are impacted the most.