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2008 AEC - Do International Remittances Affect Poverty in Africa?


International remittances flowing into developing countries are attracting increasing attention because of their rising volume and their impact on recipient countries. In 2007, estimates indicate that such remittances to developing countries totaled US$240 billion out of the global amount of US$318 billion. Though those flows are under-reported, a high proportion of the reported flows went to Africa, indicating that the continent has been part of the overall rising global trend. Between 2000 and 2007, remittances to the continent increased by more than 141 percent, from US$11.2 billion to nearly US$27 billion. Studies on the impact of international remittances had been confined mostly to Latin America and South Asia, where remittance volumes swamp those going to Africa. Indeed, few studies have examined the impact of international remittances on poverty in a broad panel of African (Sub-Saharan and North African) countries. This paper tries to fill this lacuna by constructing a panel data set on poverty and international remittances for African countries. It essentially examines the impact of international remittances on poverty reduction in African countries using panel data of 33 countries over the period 1990-2005.

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