Migrants' Remittances and economic growth in sub-Saharan African countries: Nonlinearity and threshold analysis

Abstract This paper examines the relationship between remittance inflows and economic growth for the 45 Saharan African countries over the period 2000–2020. The objective of this paper is to determine the optimal level of remittances, which, once attained, will increase economic growth with remittance inflows. By performing the dynamic panel threshold model, we found that the nexus between remittances and economic growth is nonlinear. Besides, results show that there exists a statistically positive relationship between financial transfers from migrants and economic growth above the threshold level of 12.71%, above which remittance inflows increase economic growth in the countries of sub-Saharan Africa. The findings are robust and provide circumstantial support for remittance inflows to promote economic growth. On the basis of the findings, this study proposes several policy recommendations. JEL Classification codes : F24, F21, C24, O55