FOREIGN AIDS, REMITTANCES AND ECONOMIC DEVELOPMENT IN SUB –SAHARA AFRICAN COUNTRIES

Abstract

The study is centred on the interrelationship between foreign aids, remittances and economic development in sub-Sahara African countries from 2000-2022. The study adopted unit root test, co- integration test tool, error correction model and granger causality model as statistical technique. Secondary data were gathered from world bank data base of various years. All the variables were stationary at first difference. The co-integration test shows that there is presence of long run relationship between the study variables. . The ECM results show that: only personal remittance contributes to the building of human development index of Sub –Sahara African (SSA) countries; Bilateral aid (BLA) is insignificant in contributing to the development of the SSA while multilateral aid, remittance from export (RE) failed to promote economic development in the region proxies as Human development index. The granger causality result shows that all the dependent variables support human development index in the development process. The study conclude that personal remittance is the key driver for economic development in the sub-Sahara region. However, the study recommends that regional government should encourage or promote more remittances from migrants by deepening the financial system, promote local production which will boost export; Create an enabling environment within the region to attract more investors from developed economy.