Macroeconomic Determinants of RemittanceInflows into Subsahara Africa

Abstract

The role of macroeconomic factors in determining remittance inflows has long been discussed in
the literature. However, conflicting results, majorly due to the large consideration given to static
analysis have kept the debate on. This and the importance of recognizing what determines
remittance inflows into Sub-Saharan Africa influenced the emergence of this study. The study
employed secondary data obtained from World Bank's World Development Indicators (WDI) for
the period between 1996 and 2019. The parameters of the model were estimated using the panel
autoregressive distributive lag (PARDL) model. The findings revealed that macroeconomic
factors such as trade openness and global financial crisis led to increase in remittance inflows into
Sub-Saharan Africa while the level of financial development caused a setback to these inflows. The
study concluded that better macroeconomic conditions and financial crisis level attract more
inflows of remittances into Sub-Saharan Africa. The study recommended that policymakers in
Sub-Sahara African countries should take painstaking effort to liberalize their trade relation with
the global community in order to aid good ties with them and consequently influence greater
inflows of remittance into the region.