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Macroeconomic environment and remittances in post-independent Sub-Saharan Africa: Magnitudes, trends and stylised facts

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  • Adenutsi, Deodat
  • Aziakpono, Meshach
  • Ocran, Matthew

Abstract

This paper examines macroeconomic performance and policy environment of post-independent sub-Saharan Africa (SSA) vis-à-vis remittance flows to the sub-region. The paper finds that SSA is the only developing region in the world that still depends on foreign aid as its leading external non-debt capital and attracts the least remittances, notwithstanding the positive growth trend since the pursuit of economic policy reforms in the 1980s. In general, low inflation, higher real income growth, domestic savings, investment, exports, financial development, and fiscal policy effectiveness strongly and positively correlate with remittance inflows. This implies remittances are likely to be driven by sound macroeconomic environment in recipient countries. An affirmation of this finding is that, in SSA, (and, indeed, for all developing economies), remittances are pro-cyclical and positively correlate with macroeconomic performance and stability.

Suggested Citation

  • Adenutsi, Deodat & Aziakpono, Meshach & Ocran, Matthew, 2011. "Macroeconomic environment and remittances in post-independent Sub-Saharan Africa: Magnitudes, trends and stylised facts," MPRA Paper 42426, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:42426
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    References listed on IDEAS

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    1. Deodat E. Adenutsi & Meshach J. Aziakpono & Matthew K. Ocran, 2011. "The Changing Impact Of Macroeconomic Environment On Remittance Inflows In Sub-Saharan Africa," Journal of Academic Research in Economics, Spiru Haret University, Faculty of Accounting and Financial Management Constanta, vol. 3(2 (July)), pages 136-167.
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    4. Brown, Richard P. C., 1997. "Estimating remittance functions for Pacific Island Migrants," World Development, Elsevier, vol. 25(4), pages 613-626, January.
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    6. Marta Ruiz-Arranz & Mr. Erik Lueth, 2007. "Are Workers' Remittances a Hedge Against Macroeconomic Shocks? the Case of Sri Lanka," IMF Working Papers 2007/022, International Monetary Fund.
    7. Mr. Serdar Sayan, 2006. "Business Cycles and Workers' Remittances: How Do Migrant Workers Respond to Cyclical Movements of GDP At Home?," IMF Working Papers 2006/052, International Monetary Fund.
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    Cited by:

    1. Deodat E. Adenutsi, 2014. "macroeconomic determinants of workers’ remittances and compensation of employees in sub-saharan Africa," Journal of Developing Areas, Tennessee State University, College of Business, vol. 48(1), pages 337-360, January-M.

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    More about this item

    Keywords

    Macroeconomic Performance; Remittances; Developing Economies; Correlation; Sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania
    • F54 - International Economics - - International Relations, National Security, and International Political Economy - - - Colonialism; Imperialism; Postcolonialism
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances

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