This article explores the influence of remittances on economic development in the region, focusing on their effects on savings (SAV), remittance inflows, the monetary base and overall economic growth from 1998 to 2022. This study employs the system generalised method of moments to analyse the impact of remittances on economic growth in Sub-Saharan Africa (SSA). It examines the connection between remittances and important economic factors, such as real gross domestic product (RGDP), money supply (M2) and government expenditure (GEX). Through empirical analysis, it is found that remittances positively influence key economic indicators such as RGDP, money supply (IBM) and GEX. The results suggest that remittances contribute to enhancing domestic SAV and investment, thereby stimulating economic growth. The results emphasise the significance of remittances as a crucial source of external funding for Sub-Saharan African nations, showcasing their ability to promote sustainable development and alleviate poverty in the region.

Remittances, economic growth, system GMM analysis, Sub-Saharan Africa

Abeka, M. J., Andoh, E., Gatsi, J. G., Kawor, S., Junior, M., Andoh, E., Gatsi, J. G., & Kawor, S. (2021). Financial development and economic growth nexus in SSA economies: The moderating role of telecommunication development. Cogent Economics & Finance, 9(1). https://doi.org/10.1080/23322039.2020. 1862395

Ahortor, C. R. K., & Adenutsi, D. E. (2009). The impact of remittances on economic growth in small-open developing economies. Journal of Applied Sciences, 9(18), 3275–3286. https://doi.org/10.3923/jas.2009.3275.3286

Aizenman, J., Jinjarak, Y., & Park, D. (1990). Capital flows and economic growth in the era of financial integration and crisis. http://www.nber.org/papers/w17502

Alok, P. J., & Mishra, K. (2022). Macroeconomic determinants of remittances to India. Economic Change and Restructuring, 55(2), 1229–1248. https://doi.org/10.1007/s10644-021-09347-3

Arellano, C. M., & Markman, H. J. (1995). The managing affect and differences scale (MADS): A self-report measure assessing conflict management in couples. Journal of Family Psychology, 9(3), 319–334. https://doi.org/10.1037/0893-3200.9.3.319.1568522

Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58(2), 277–297.

Ayana, I. D., Demissie, W. M., & Sore, A. G. (2023). Fiscal policy and economic growth in Sub-Saharan Africa: Do governance indicators matter? PLoS One, 18, e0293188. https://doi.org/10.1371/journal.pone.0293188

Baldé, Y. (2011). The impact of remittances and foreign aid on savings/investment in sub-Saharan Africa. African Development Review, 23(2), 247–262. https://doi.org/10.1111/j.1467-8268.2011.00284.x

Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115–143. https://doi.org/10.1016/S0304-4076(98)00009-8

Corresponding, H. N. A. (2012). Financial development and economic growth in the UAE: Empirical assessment using ARDL approach to co-integration. International Journal of Economics and Finance, 4(5), 105–115. https://doi.org/10.5539/ijef.v4n5p105

Cyntia ROSA, DEWI. (2002). Picornavirus. Virus 52(1), 1–5.

de Haas, H. (2021). A theory of migration: The aspirations-capabilities framework. In Comparative migration studies (vol. 9, issue 1). Comparative Migration Studies. https://doi.org/10.1186/s40878-020-00210-4

Eggoh, J., Bangake, C., & Semedo, G. (2019). Do remittances spur economic growth? Evidence from developing countries. Journal of International Trade and Economic Development, 28(4), 391–418. https://doi.org/10.1080/09638199.2019.

Feeny, S., Iamsiraroj, S., & McGillivray, M. (2014). Remittances and economic growth: Larger impacts in smaller countries? Journal of Development Studies, 50(8), 1055–1066. https://doi.org/10.1080/00220388.2014.895815

Gashu, B. A. (2021). Impact of capital flow on economic growth in Ethiopia: Empirical evidence from (1980–2010) using ARDL approach. https://doi.org/10.21203/rs.3.rs-393202/v1

Góes, C. (2016). Institutions and growth: A GMM/IV panel VAR approach. Economics Letters, 138, 85–91. https://doi.org/10.1016/j.econlet.2015.11.024

Haas, H. De. (2007). Remittances, migration and social development. United Nations Research Institute for Social Development.

History, M. (2021). Impact of public consumption on economic growth. African Journal of Economics and Sustainable Development, 4(3), 61–71. https://doi.org/10.52589/AJESD

Hwang, J., & Sun, Y. (2018). Should we go one step further? An accurate comparison of one-step and two-step procedures in a generalized method of moments framework. Journal of Econometrics, 207(2), 381–405. https://doi.org/10.1016/j.jeconom.2018.07.006

Im, K. S., Pesaran, M. H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of Econometrics, 115(1), 53–74. https://doi.org/10.1016/S0304-4076(03)00092-7

Jongwanich, J. (2007). Workers’ remittances, economic growth and poverty in developing Asia and the Pacific Countries [MPDD Working Paper Series WP/07/01]. United Nations Economic and Social Commission for Asia and the Pacific.

Kratou, H., & Gazdar, K. (2015). Addressing the effect of workers’ remittance on economic growth: Evidence from MENA countries. International Journal of Social Economics, 43(1), 51–70. https://doi.org/10.1108/IJSE-08-2013-0189

Kwabena, T. D., Ebo, T. F., Frimpong, W. B., Antwi, D. S., & Kwabena, T. D. (2020). Do foreign financial inflows impact on economic growth? Evidence from sub-saharan Africa. Studies of Applied Economics, 38(2), 1–14.

Rao, N. (2016). The impact of remittances on economic growth in Ethiopia. Indian Journal of Commerce & Management Studies, 2, 1–15. http://www.scholarshub.net

Ribaj, A., & Mexhuani, F. (2021). The impact of savings on economic growth in a developing country (the case of Kosovo). Journal of Innovation and Entrepreneurship, 6, 1–13.

Roodman, D. (2009). How to do xtabond2: An introduction to difference and system GMM in Stata. Stata Journal, 9(1), 86–136. https://doi.org/10.1177/1536867x0900900106

Salazar. (2012). No Titleענף הקיווי: תמונת מצב. עלון הנוטע, 66(3), 37–39.

Sutradhar, S. R. (2020). The impact of remittances on economic growth in Bangladesh, India, Pakistan and Sri Lanka. International Journal of Economic Policy Studies, 14(1), 275–295. https://doi.org/10.1007/s42495-020-00034-1

Vonneilich, N. (2022). Social relations, social capital, and social networks: A conceptual classification. In: A. Klärner, M. Gamper, S. Keim-Klärner, I. Moor, H. von der Lippe, & N. Vonneilich (Eds), Social networks and health inequalities (pp. 23–34). Springer International Publishing. https://doi.org/10.1007/978-3-030-97722-1_2

World Bank. (2023). Global economic prospects. World Bank. https://doi.org/10.1596/978-1-4648-1899-4

Yaekob, T. (2016). Relation of government expenditure with economic growth and poverty reduction in Ethiopian - ARDL analysis. International Journal of Current Research, 8(12), 43215–43221. https://www.journalcra.com/article/relation-government-expenditure-economic-growth-and-poverty-reduction-ethiopian-ardl

Yusheng, K., Bawuah, J., Nkwantabisa, A. O., Atuahene, S. O. O., & Djan, G. O. (2021). Financial development and economic growth: Empirical evidence from Sub-Saharan Africa. International Journal of Finance and Economics, 26(3), 3396–3416. https://doi.org/10.1002/ijfe.1967

Zahonogo, P. (2017). Trade and economic growth in developing countries: Evidence from sub-Saharan Africa. Journal of African Trade, 3(1/2), 41. https://doi.org/10.1016/j.joat.2017.02.001

Zardoub, A., & Sboui, F. (2023). Impact of foreign direct investment, remittances and official development assistance on economic growth: Panel data approach. PSU Research Review, 7(2), 73–89. https://doi.org/10.1108/PRR-04-2020-0012