Examining the sustainable development approach of migrants' remittances and financial development in sub-Saharan African countries

In achieving a desirable sustainable economic growth in developing countries, the role of financial development and international migrant remittances cannot be underplayed. This study attempts to investigate the dynamic interactions between the migrant remittances and the financial sector development from a multidimensional perspective in 22 sub-Sahara African countries using a panel vector autoregression model over the period 2004–2017. Specifically, the study focuses on the multidimensions of financial development including financial depth, financial access, and financial efficiency in financial institutions (FI) and their relationship with the remittances. The findings suggest that: First, the migrant's remittances are detrimental for the overall FI while the FI are found to positively influence the remittances inflows. Second, the relationship between the remittances and the FI varies with the dimensions of FI. There is a positive dynamic interaction between the remittances, the financial efficiency, and financial access, except for the financial depth. The analysis in this investigation offers relevant policy directives especially on the role of remittances in building stable FI of the sub-Saharan African economies and other developing states.