Do Remittances Improve the Economic Growth of Africa?

This paper assesses the effect of remittance money amongst other variables on the economic growth of Africa through the experiences of Cameroon, Kenya, Lesotho, Morocco and Nigeria which are situated in different sub-regions, and sub-regional schemes and are representative of the classification table of remittances into Africa. Data for the study is collected from the World Bank Development Indicators, covering a period of 31 years from 1980 to 2010. The estimation technique used for this study is the two stages least square method. The analyses (both descriptive and empirical) showed that remittance money has a positive and significant effect on economic growth in both the aggregate model and disaggregated models. The paper concludes that these findings are important and should be taken into consideration in the design of prgrammes and policies relating to remittances in Africa. In fact, the behavior of this variable should be incorporated in the approaches, programmes and policies of remittances in the different sub-regions and economic groupings in Africa. Really, an important conclusion is that ways should be explored to increasingly channel remittance money to productive investments.