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Dr. John Norense Izevbigie, Dr. Clement A. Ighodaro and Mr. Esosa J. Sowemimo
Volume 3 Issue 1 | Mar 2020
DOI: 10.31841/KJEMS.2021.39
Views: 2390
Total Downloads: 7
The comparative effect of remittances and foreign aid inflows on economic growth in ECOWAS sub-region was examined for the period spanning 2005 and 2017. GMM estimation technique employed shows that the effect of remittances on economic growth outweighs foreign aid inflow in ECOWAS sub region for the period. This was evidenced in the magnitude of coefficient and the predictability of each of the variables. The periodic analysis shows that remittances and foreign aid inflow positively affects economic growth with the exception of years 2005 and 2006. Also, the probability value of j-statistics shows that the moment restriction is valid and that the model is well specified. However, wald test, variance decomposition test, movement graph and principal component analysis test revealed that foreign aid exerts more influence on economic growth compared to remittances inflows in ECOWAS sub region for the period. Recommendations such as ensuring that remittances and foreign aid inflows are continually channel into productive uses through policy and policy coordination in ECOWAS sub region were put forward. Keywords: ECOWAS, Remittances, Foreign Aid, Economic Growth