Financial Inclusion and Remittance Inflows on Human Development in Sub-Saharan Africa

Purpose: This study examines the influence of financial inclusion and remittance inflows on human development in Sub-Saharan Africa. Methodology: It employs secondary data from the World Development Indicators (WDI) for the years 2003–2024. The study implements Ordinary Least Squares (OLS), Random Effects Model, and Generalized Method of Moments (GMM) as estimation techniques to ensure robustness and address potential endogeneity and dynamic relationships among the variables. It also adopts a quantitative research approach. Financial inclusion and remittances are the primary explanatory variables, while the Human Development Index (HDI) is used to measure human development. GDP, education, and inflation are included as control variables. Findings: The results indicate that financial inclusion and remittance inflows have substantial positive impacts on human development throughout the region. These findings indicate that the inflow of diaspora funds and the increased access to formal financial services make a substantial contribution to the enhancement of education, health, and living standards. Additionally, the dynamic GMM estimates verify that these effects are enduring. Nevertheless, inflation has a detrimental impact on human development, underscoring the necessity of macroeconomic stability in order to maintain development progress. The study concludes that financial inclusion and remittances are critical factors in the advancement of human development in Sub-Saharan Africa. Unique contribution to theory, practice and policy: It suggests that policymakers should enhance regulatory frameworks, reduce remittance costs, and promote financial literacy in order to expand inclusive finance. Furthermore, the positive developmental effects of financial flows in the region will be further bolstered by endeavours to maintain price stability and improve institutional quality. The research offers essential insights for the implementation of sustainable development objectives in Africa and the formulation of inclusive growth strategies.