Determinants of Remittance: Panel Evidence From Selected Countries In Africa

Abstract

The African continent has over 30 million people in the Diaspora and sends over 50 billion US Dollars to theirfamilies and communities back home ahead of FDI and ODA. It is on this premise that this study carries out aninvestigation on the determinants of Remittance across 21 African countries with neat selection from all theregions. The study uses the GMM estimation in a dynamic panel to find out that Remittance receipt of theprevious year, broad money growth, taxes, inflation, lending rate and age dependency ratio are significantdeterminants of remittance, while GDP per capita and real effective exchange rate are not. However, while broadmoney growth, tax revenue, GDP per capita, and real effective exchange rate are inversely related to Remittancereceipt, lending rate, age dependency ratio and inflation are positively related.Keywords: Determinants, Remittance, Africa, Dynamic panel.