DIASPORA REMITTANCES AND POVERTY REDUCTION: THE CASE OF SUB-SAHARAN AFRICA COUNTRIES
There has been massive inflow of diaspora remittances to Sub Saharan African Countries in recent times, perhaps for investment and smoothening consumption and hence reduce poverty level in the region. However, empirical studies on the impact of diaspora remittances on poverty reduction is sparse, despite plethora of empirical evidences in other remittance recipient regions like Asia and Latin America. Using time series and cross-sectional data from 1990 to 2020 obtained from World Development Indicators of World Bank, this present study examine the impact of diaspora remittances on poverty level in Sub Saharan African Countries in order to recommending how to channel this huge resource into more productive use. The Panel Ordinary Least Square (OLS) panel data regression model was used to examine the impact of remittances on poverty level in the region. Result showed that diaspora remittances have the potential to ameliorate poverty level in countries with high (β = -0.9467; t= -9.2913) and moderate (β = -6.9959; t= -7.9106) remittance recipient Sub Saharan Africa countries, while poverty was aggravated in countries with low (β = 1.1251; t= 5.8310) remittance recipient countries. Moreover, the observed impact is not significant as expected due to the structure of most Sub Saharan African Countries (β= -0.2657; t= -1.9399). Based on the findings, this study therefore recommend that government of various Sub Saharan African countries should implement policies to increase remittance inflow and also channel these resources to more productive investments, rather than being used as consumption income.
Smoothening Consumption, Increase Remittance, Remittances Inflow, Ameliorate Poverty, Productive Investments, Consumption Income