The Impact of Remittances on Economic Growth: Evidence from African countries

This study uses the panel ARDL model to estimate the relationship between remittances and economic growth in 25African 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.