Exploring the interactive effects of remittances, financial development and ICT in Sub-Saharan Africa: an ARDL bounds approach

Abstract

In this paper, using the ARDL bounds approach and augmented Solow framework, we explore the impacts of capital inflows (remittances, foreign direct investment and overseas development assistance) and financial-technology inclusion viz. remittance on per worker income in Sub-Saharan Africa (SSA) for the periods 1970-2010. The results show that growth in the region is lead by capital productivity. Although information and communications technology (ICT) per se has a negative effect on income, when ICT is associated with financial development and remittances, the effects are positive in both short run and long run. Thus, there is a need for greater financial and technology inclusion - linking remittance industry with financial and ICT services. Overseas development assistance (ODA) shows a negative elasticity while FDI and remittances per se is negative and not statistically significant. SSA's predominantly ruralised economic structure further calls for greater accessibility,...