Remittances, natural resource rent and economic growth in Sub-Saharan Africa

Pamela Ofori (), Daryna Grechyna and Muhammad Shafiullah

Cogent Economics & Finance, 2021, vol. 9, issue 1, 1979305

Abstract: Despite the established link between oil rent fluctuations and remittances received, its plausible joint effect on economic growth in Sub-Saharan Africa (SSA) remains unexplored. To fill this gap, first, we determine whether natural resource rent (composed of oil rent, forest rent and natural gas rent) reduces economic growth in SSA. Second, we examine whether positive macroeconomic signals such as remittances mitigate the negative effect of oil rents on economic growth in a sample of 43 SSA countries spanning 1990–2017. We employ the pooled ordinary least squares, fixed-effects, random-effects and generalized method of moments. The resulting empirical evidence established are: (1) there is a positive impact of forest rent on economic growth whilst oil rent and natural gas rent have a negative impact on economic growth (2) there is a positive marginal and net effect on economic growth from the interaction between remittances and oil rent. In addition, the unconditional effect of remittances on growth is positive. We further perform a threshold analysis to establish a critical ground that could also influence economic growth positively. This threshold is crucial because below these critical mass remittance inflows mitigate the negative incidence of oil rent on economic growth and above the threshold, negative oil rent on growth is completely nullified. This is relevant for policy implications because policymakers are provided with actionable levels of remittances which are easily attainable in sampled countries.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (28)

Downloads: (external link)
http://hdl.handle.net/10.1080/23322039.2021.1979305 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Remittances, Natural Resource Rent and Economic Growth in Sub-Saharan Africa (2021)
Working Paper: Remittances, Natural Resource Rent and Economic Growth in Sub-Saharan Africa (2021)
Working Paper: Remittances, Natural Resource Rent and Economic Growth in Sub-Saharan Africa (2021)
Working Paper: Remittances, Natural Resource Rent and Economic Growth in Sub-Saharan Africa (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:oaefxx:v:9:y:2021:i:1:p:1979305

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/OAEF20

DOI: 10.1080/23322039.2021.1979305

Access Statistics for this article

Cogent Economics & Finance is currently edited by Steve Cook, Caroline Elliott, David McMillan, Duncan Watson and Xibin Zhang

More articles in Cogent Economics & Finance from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().