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Flow of Migrants’ Remittances into Sudan: the Role of Macroeconomic Environment

Author

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  • Ebaidalla Mahjoub Ebaidalla

    (Lecturer at the Department of Economics, University of Kassala, Sudan.)

  • Abdalla Ali Edriess

Abstract

Considering the importance of migrants’ remittances as a vital source of financing economic development and foreign exchange in Sudan’s economy, this study investigated the role of macroeconomic environment in attracting migrants’ remittances into Sudan. To do so, the study used the Autoregressive Distributed Lag (ARDL) to cointegration method, Impulse Response Functions (IRSs) and Variance Decomposition (VDC) techniques. The empirical results indicate that macroeconomic policy variables play an important role in encouraging the flow of remittances via formal channels. The inflation rate and the black market exchange rate premium have a negative and significant effect on remittances in both the short and long-run. The home income variable is found to be discouraging for the flow of remittances, supporting the altruistic behaviour of emigrants in transferring money. Moreover, the study found that trade openness and foreign income exerts positive effects on remittances. Based on these findings, the paper concludes with some policy implications regarding the improvement of the macroeconomic environment as a necessary condition to facilitate the flow of remittances through official channels.

Suggested Citation

  • Ebaidalla Mahjoub Ebaidalla & Abdalla Ali Edriess, 2012. "Flow of Migrants’ Remittances into Sudan: the Role of Macroeconomic Environment," Working Papers 741, Economic Research Forum, revised 2012.
    • Handle: RePEc:erg:wpaper:741
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    References listed on IDEAS

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    1. Elbadawi, Ibrahim A., 1992. "Macroeconomic management and the black market for foreign exchange in Sudan," Policy Research Working Paper Series 859, The World Bank.
    2. Elbadawi, Ibrahim A, 1994. "The Expatriate Workers' Remittances, Parallel Foreign Exchange Market and Macroeconomic Performance in Sudan," Journal of African Economies, Centre for the Study of African Economies, vol. 3(3), pages 481-512, December.
    3. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    4. Ralph Chami & Connel Fullenkamp & Samir Jahjah, 2005. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Staff Papers, Palgrave Macmillan, vol. 52(1), pages 55-81, April.
    5. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    6. Lucas, Robert E B & Stark, Oded, 1985. "Motivations to Remit: Evidence from Botswana," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 901-918, October.
    7. Mrs. Poonam Gupta, 2005. "Macroeconomic Determinants of Remittances: Evidence from India," IMF Working Papers 2005/224, International Monetary Fund.
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    Cited by:

    1. Ebaidalla Mahjoub Ebaidalla, 2017. "Determinants and Macroeconomic Impact of Parallel Market For Foreign Exchange in Sudan," Working Papers 1155, Economic Research Forum, revised 11 2017.

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