THE IMPACT OF MIGRANT REMITTANCES ON POVERTY REDUCTION IN SELECTED AFRICAN COUNTRIES

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THE IMPACT OF MIGRANT REMITTANCES ON POVERTY REDUCTION IN SELECTED AFRICAN COUNTRIES

 

ABSTRACT

International remittance is fast becoming a stable potential source of household income. Migrant remittances have generated a lot of academic interests because of its potential benefits to the individuals, households, local communities and national economies. This is because unlike other sources of financial inflows like FDI and ODA, it is usually counter cyclical to the economies of its recipients. This study using the Ravallion poverty growth nexus empirically examined the cushioning effects of international migrant remittances on poverty reduction in selected African countries. Secondary data colleted from IFS and global development finance were analyzed using the OLS panel regression method with the PCgive econometric package. The following were found: international migrant remittances to Africa reduce poverty incidence by 3.2% for every 10% increase in remittances; and poverty depth by 4.2% for every 10% increase in remittance flows, And Per-Capita Income (PCY) reduces poverty depth by 3.13% and incidence by 3.0% in the selected countries of Africa for every 10% increase in per capita income. This study recommends the following: to the governments of the recipient countries in conjunction with their financial institutions- an improved records on remittance flows to aid research; and better immigration policies to aid the migration. To the governments of the host countries, this study recommends that bottleneck policies which inhibit discretional remittances as willed by migrants to their home lands should be reviewed. This calls for a review of the minimum external transferable funds by people.

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