Foreign Remittances, Good Governance and Human Development in Sub-Saharan Africa: Evidence from FMOLS and DOLS

  • Kabiru Kamalu Faculty of Business and Management, Universiti Sultan Zainal Abidin (UniSZA)
  • Wan Hakimah Binti Wan Ibrahim Faculty of Business and Management, Universiti Sultan Zainal Abidin (UniSZA)
Keywords: Remittances, Governance, Human development, Sub-Saharan Africa


Even though some progress has been recorded in terms of GDP growth in Sub-Saharan Africa, still the region has high level of extreme poverty, income inequality, insecurity, consequently low human development. This study examined the effect of foreign remittances and governance on human development for 20 countries of sub-Saharan Africa, using data from 1996 to 2019. The study used FMOLS and DOLS methods to estimates the long run coefficients. All the variables are I(1), have cross section dependency and cointegrated. The results revealed that foreign remittances and governance promote long run human development in sub-Saharan Africa. The results also show that inflation, population growth and military expenditures found to have negative long run effect on human development, while financial development have positive long run effect on human development in sub-Saharan Africa.  Therefore, to promote human development, policies that will attract and encourage sending remittances through official channel should be put in place, especially related to the cost of sending remittances to sub-Saharan Africa. Also, policies to strengthen institutions and provide quality regulatory and legal framework for equitable distribution of resources to reduce poverty, and the cost of doing business, thereby promoting business activities, human capital development, consequently higher human development.


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How to Cite
Kamalu, K., & Binti Wan Ibrahim , W. H. (2021). Foreign Remittances, Good Governance and Human Development in Sub-Saharan Africa: Evidence from FMOLS and DOLS. The Journal of Management Theory and Practice (JMTP), 2(4), 38-48.
Finance & Economics