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Impact of Remittanceson Poverty and Financial Development in Sub-Saharan Africa

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  • Sanjeev Gupta
  • Catherine A. Pattillo
  • Smita Wagh
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    Abstract

    This paper assesses the impact of the steadily growing remittance flows to sub-Saharan Africa (SSA). Though the region receives only a small portion of the total recorded remittances to developing countries, and the volume of aid flows to SSA swamps remittances, this paper finds that remittances, which are a stable, private transfer, have a direct poverty mitigating effect, and promote financial development. These findings hold even after factoring in the reverse causality between remittances, poverty and financial development. The paper posits that formalizing such flows can serve as an effective access point for "unbanked" individuals and households, and that the effective use of such flows can mitigate the costs of skilled out-migration in SSA.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 07/38.

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    Length: 43
    Date of creation: 01 Feb 2007
    Date of revision:
    Handle: RePEc:imf:imfwpa:07/38

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    Related research

    Keywords: Workers remittances; Poverty reduction; Financial sector; Development; remittances; migration; migrant; remittance; international migration; migrant remittances; migrant workers; impact of remittances; remittance flows; effect of remittances; money transfers; capital flows; money transfer; migrant transfers; intraregional migration; workers ? remittances; inflow of remittances; impact of remittances on poverty; large-scale migration; recipients of remittances; labor mobility; worker remittances; role of remittances; incoming remittances; impact of remittances on growth; small remittances; migrant communities; money transfer operators; international remittances; direct impact of remittances; cost of migration; average remittance; remittance receipts; migration rates; effect of remittances on poverty; immigrant population; skilled migration; remittance services; migrant population; remittance data; impact of remittances on financial development; diaspora; flow of remittances; remittance market; migrant community; data on remittances; informal money transfer systems; survey of remittance products; remittance products; benefit from remittances; international transfer; remittances to investment; remittance network; determinants of remittances; effects of migration; money transfer divide; money transfer systems; small ? remittances; economic implications of remittances; international mobility; volume of remittances; demand for remittance; effectiveness of remittances; cost of remittances; use of remittances; income from remittances; effectiveness of remittance; informal remittances; remittance-receiving households; future remittance; international remittance; remittance inflows; remittance costs; remittances inflows; domestic labor markets; average remittances; immigrant remittance; flows of remittances; deterrent to remittances; international remittance network; international migration review;

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    References

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    Citations

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    Cited by:
    1. Mihasonirina Andrianaivo & Charles Amo Yartey, 2009. "Understanding the Growth of African Financial Markets," IMF Working Papers 09/182, International Monetary Fund.
    2. Ritha Sukadi Mata, 2009. "Microfinance Institutions (MFIs) on the Remittances Market: Money Transfer Activity and Savings Mobilisation," Working Papers CEB 09-022.RS, ULB -- Universite Libre de Bruxelles.
    3. Yaw Nyarko & Kwabena Gyimah-Brempon, 2011. "Social Safety Nets: The Role of Education, Remittances and Migration," RSCAS Working Papers 2011/26, European University Institute.
    4. Rocher, E. & Pelletier, A., 2008. "Migrant workers’ remittances: what is the impact on the economic and financial development of Sub-Saharan African countries?," Quarterly selection of articles - Bulletin de la Banque de France, Banque de France, issue 13, pages 103-120, Autumn.
    5. Nyamongo, Esman Morekwa & Misati, Roseline N. & Kipyegon, Leonard & Ndirangu, Lydia, 2012. "Remittances, financial development and economic growth in Africa," Journal of Economics and Business, Elsevier, vol. 64(3), pages 240-260.
    6. Andrew Burns & Sanket Mohapatra, 2008. "International Migration and Technological Progress," World Bank Other Operational Studies 11021, The World Bank.
    7. Albert Bollard & David McKenzie & Melanie Morten, 2009. "The Remitting Patterns of African Migrants in the OECD," CReAM Discussion Paper Series 0921, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    8. Francis Kemegue & Emmanuel Owusu-Sekyere & Renee van Eyden, 2011. "What Drives Remittance Inflows to Sub-Saharan Africa? A Dynamic Panel Approach," Working Papers 201128, University of Pretoria, Department of Economics.
    9. Rémi Generoso, 2012. "Transferts de fonds et résilience des pays d'Afrique de l'Ouest face à la variabilité des précipitations : une perspective macroéconomique," Working Papers hal-00830021, HAL.
    10. Andreas Billmeier & Isabella Massa, 2007. "What Drives Stock Market Development in the Middle East and Central Asia," IMF Working Papers 07/157, International Monetary Fund.
    11. Ratha, Dilip & Mohapatra, Sanket & Scheja, Elina, 2011. "Impact of migration on economic and social development : a review of evidence and emerging issues," Policy Research Working Paper Series 5558, The World Bank.
    12. International Monetary Fund, 2008. "Can Regional Cross-Listings Accelerate Stock Market Development? Empirical Evidence From Sub-Saharan Africa," IMF Working Papers 08/281, International Monetary Fund.
    13. Francis M. Kemegue & Reneé van Eyden & Emmanuel Owusu-Sekyere, 2011. "Remittances and the Dutch disease in Sub-Saharan Africa. A Dynamic Panel Approach," Working Papers 259, Economic Research Southern Africa.

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