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Remittances, financial development, and economic growth in African countries

Author

Listed:
  • Eric Fina kamani

    (University of Tours - LEO - LéP)

  • Amadé Nacanabo

    (Virtual University of Burkina Faso - LéP)

  • Olivier Beguy

    (African Development Bank Group (AFDB))

  • Ibrahima Diouf

    (University of Poitiers - LéP - CIMP)

  • Gervasio Semedo

    (University of Tours - LEO)

Abstract

This study examines the impact of remittances on economic growth in African countries, with a particular focus on the role of financial development. Unlike previous research, it adopts a two-step approach: first, it identifies the key growth determinants using Bayesian inference techniques; second, it estimates panel smooth transition regression (PSTR) models, incorporating these determinants as controls. The results indicate that remittances alone do not have a significant impact on economic growth. However, their positive effects are amplified in the presence of a well-functioning financial system. The study recommends that African policymakers prioritize financial sector reforms to fully harness the growth-enhancing potential of remittances.

Suggested Citation

  • Eric Fina kamani & Amadé Nacanabo & Olivier Beguy & Ibrahima Diouf & Gervasio Semedo, 2025. "Remittances, financial development, and economic growth in African countries," Economics Bulletin, AccessEcon, vol. 45(1), pages 243-262.
    • Handle: RePEc:ebl:ecbull:eb-23-00062
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    More about this item

    Keywords

    Remittances; Economic growth; Financial development;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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