Foreign Aid, Remittances and Poverty in Sub-Saharan Africa (2007-2018)

S. O. Falana, S. D. Salako, S. M. Akinsanya, L. O. Awoyinka, A. Salaudeen and O. J. Adewoye
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S. O. Falana: Department of Economics, Federal University of Agriculture, Abeokuta (FUNAAB), P.M.B. 2240, Abeokuta, Nigeria. Department of Agricultural Economics and Farm Management, FUNAAB. The Federal Polytechnic, Ilaro. Department of Computer Science, Yaba College of Technology.
S. D. Salako: Department of Economics, Federal University of Agriculture, Abeokuta (FUNAAB), P.M.B. 2240, Abeokuta, Nigeria. Department of Agricultural Economics and Farm Management, FUNAAB. The Federal Polytechnic, Ilaro. Department of Computer Science, Yaba College of Technology.
S. M. Akinsanya: Department of Economics, Federal University of Agriculture, Abeokuta (FUNAAB), P.M.B. 2240, Abeokuta, Nigeria. Department of Agricultural Economics and Farm Management, FUNAAB. The Federal Polytechnic, Ilaro. Department of Computer Science, Yaba College of Technology.
L. O. Awoyinka: Department of Economics, Federal University of Agriculture, Abeokuta (FUNAAB), P.M.B. 2240, Abeokuta, Nigeria. Department of Agricultural Economics and Farm Management, FUNAAB. The Federal Polytechnic, Ilaro. Department of Computer Science, Yaba College of Technology.
A. Salaudeen: Department of Economics, Federal University of Agriculture, Abeokuta (FUNAAB), P.M.B. 2240, Abeokuta, Nigeria. Department of Agricultural Economics and Farm Management, FUNAAB. The Federal Polytechnic, Ilaro. Department of Computer Science, Yaba College of Technology.
O. J. Adewoye: Department of Economics, Federal University of Agriculture, Abeokuta (FUNAAB), P.M.B. 2240, Abeokuta, Nigeria. Department of Agricultural Economics and Farm Management, FUNAAB. The Federal Polytechnic, Ilaro. Department of Computer Science, Yaba College of Technology.

International Journal of Research and Scientific Innovation, 2024, vol. 11, issue 8, 698-725

Abstract: This study examined the impact of foreign aid and remittances on poverty in 37 sub-Saharan African countries from 2007 to 2018, a region that has received significant aid and remittances over the past 20 years. Key variables included Poverty Headcount (%), international remittances, and foreign aid flows. Data were obtained from the World Development Indicators, OECD, and the GCIP published by the United Nations. A dynamic panel data model was used, estimated with the system-Generalized Method of Moments (sys-GMM). The AR (2) and Hansen test statistics supported the model’s validity, and a robustness check with Real Household Final Consumption Expenditure confirmed the results. The findings indicate that remittances significantly reduce poverty in the short run but not in the long run, while foreign aid has an insignificant positive effect. The study recommends reducing remittance costs, removing barriers to inflow, and creating a policy environment that enhances the effectiveness of aid.

Date: 2024
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