World Economics - Insight , Analysis and Data

World Economics - Insight , Analysis and Data
Remittances and their Macroeconomic Impact
Mthuli Ncube & Zuzana Brixiova
World Economics, December 2013

This paper examines the macroeconomic trends, drivers and the impact of remittances in Africa. First, it documents the increasing share of remittances relative to other foreign capital flows to Africa, the distribution of remittance inflows across countries, and some key properties. This is followed by an analysis of the macroeconomic drivers of remittances in recipient countries, such as the level of income, inflation and nominal exchange rate depreciation. Specifically, remittances are positively impacted by higher income, but deterred by an unstable macroeconomic environment, pointing to the investment motive in remitting to Africa. The paper also examines the role of remittances in funding Africa’s external balances. Finally, drawing on the case of Egypt, the paper shows the positive impact that rising remittances can have on public debt sustainability.


Download paper

Related thinking:
    Can Intra-Regional Trade Act as a Global Shock Absorber in Africa?
Zuzana Brixiova, Qingwei Meng & Mthuli Ncube
World Economics, September 2015
    Taking Stock of Microfinance
Antara Haldar & Joseph Stiglitz
World Economics, June 2015
    Quicksilver Markets
Theodore Berg
World Economics, June 2015




© Copyright World Economics Ltd. 2017