Citation:

Abebe Gule Girma. "The Impact of Remittances on Economic Growth: Evidence from African countries" International Research Journal of Economics and Management Studies, Vol. 3, No. 8, pp. 482-486, 2024.

Abstract:

This study uses the panel ARDL model to estimate the relationship between remittances and economic growth in 25 African countries over the period of 1991–2020. Although the effect of remittances on economic growth is insignificant for the entire sample, the study finding shows that remittances have a positive and significant impact on the short-run economic growth in high-GDP per capita countries. This result supports the productive motives hypothesis for the effect of remittances. The study also finds a positive effect of remittances on the long-run economic growth of North African countries and on the short-run economic growth of South African economies. Finally, this study recommends that African policymakers adopt strategies such as pre-departure skill-building for migrant workers, streamlining remittance transfers, and incentivizing diaspora investments to boost the remittance inflows and contributions to their economies.

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Keywords:

Remittances, Economic growth, Panel ARDL, Africa.