Can the public debt of African countries be mitigated by migrant remittances?

Can the public debt of African countries be mitigated by migrant remittances? | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Can the public debt of African countries be mitigated by migrant remittances? Désiré AVOM, Bruno ONGO, Olivier NGUEMJOM, Ndumbe Abdelaziz Ndjoua, and 1 more This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-3969899/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract The aim of this article is to study the effect of migrant remittances (RFM) on the public debt of a sample of 48 African countries over the period 1990-2020. To achieve this, we specify a panel model that we estimate using the generalized method of moments. The results show that migrant remittances reduce public debt in Africa in such a way that a 1% increase in the level of RFM would allow a 0.015% reduction in the level of public debt of African countries. Indeed, RFM can reduce public debt levels by broadening the country's tax base, by increasing foreign exchange earnings and by misaligning the exchange rate, depending on whether or not the country's currency is pegged to a foreign currency. We recommend that decision-makers set up incentives for formal remittances via digital channels, in particular by simplifying costs and procedures, and pursue policies aimed at better inclusion of the diaspora in the realization of major development projects in Africa, with a focus of RFM on productive investments which, combined with local development policies, will in the long term make it possible to have an independent national currency. migrant remittances public debt Africa Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-3969899","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":273866148,"identity":"6143a055-9537-4acc-9e75-3a2745b5a0d5","order_by":0,"name":"Désiré AVOM","email":"","orcid":"","institution":"Université de Yaoundé II","correspondingAuthor":false,"prefix":"","firstName":"Désiré","middleName":"","lastName":"AVOM","suffix":""},{"id":273866149,"identity":"dc2e926e-ace2-4ff6-883f-f41f5af5f6bf","order_by":1,"name":"Bruno ONGO","email":"","orcid":"","institution":"Université de Yaoundé II","correspondingAuthor":false,"prefix":"","firstName":"Bruno","middleName":"","lastName":"ONGO","suffix":""},{"id":273866150,"identity":"5769ac11-7c4b-4520-b288-7a83758936c8","order_by":2,"name":"Olivier NGUEMJOM","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA+ElEQVRIiWNgGAWjYDACdsYGhgQGBmYQ+wBDBZBkZm7Ar4UZRcsZqAh+LcgcxjYwiV8LPzNzm8SDinvs/PxnDA/+nFcbzd8O1PKjYhtOLZLNjG0SCWeKmSVn5Bgc5t12PHfGYcYGxp4zt3FqMTjM2GyQ2JbAbHCDB8jediy3AaiFmbGNkJZ/Ccz2588YHPw551jufCK0ND5IbADawpBjcIC3oSZ3AyEtQL80Pkg4lsAscSOt4DDPsQO5G4FaDuLzCz97+4ODP2oSkvn7D2/++KOmLnfe+cMHH/yowK0FBpKh9GEweYCgeiCwg9J1xCgeBaNgFIyCEQYA1Gtb6uHYMxkAAAAASUVORK5CYII=","orcid":"","institution":"Université de Dschang","correspondingAuthor":true,"prefix":"","firstName":"Olivier","middleName":"","lastName":"NGUEMJOM","suffix":""},{"id":273866151,"identity":"c8d1d113-5411-44d5-8f29-2f79e3a03e51","order_by":3,"name":"Ndumbe Abdelaziz Ndjoua","email":"","orcid":"","institution":"Université de Yaoundé II","correspondingAuthor":false,"prefix":"","firstName":"Ndumbe","middleName":"Abdelaziz","lastName":"Ndjoua","suffix":""},{"id":273866152,"identity":"6d0035cf-4a3e-4fc7-b7fc-1998de01fde2","order_by":4,"name":"Ngah Ntiga Louis Henry","email":"","orcid":"","institution":"Université de Dschang","correspondingAuthor":false,"prefix":"","firstName":"Ngah","middleName":"Ntiga Louis","lastName":"Henry","suffix":""}],"badges":[],"createdAt":"2024-02-19 11:59:48","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-3969899/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-3969899/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":55367092,"identity":"3503c973-9de7-4143-9587-ab4cd22b87a6","added_by":"auto","created_at":"2024-04-26 10:08:16","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":482546,"visible":true,"origin":"","legend":"","description":"","filename":"RemittencesandPublicDept.pdf","url":"https://assets-eu.researchsquare.com/files/rs-3969899/v1_covered_1edb7a5e-dd35-4bc2-aa79-cc77ba274553.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Can the public debt of African countries be mitigated by migrant remittances?","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"migrant remittances, public debt, Africa","lastPublishedDoi":"10.21203/rs.3.rs-3969899/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-3969899/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThe aim of this article is to study the effect of migrant remittances (RFM) on the public debt of a sample of 48 African countries over the period 1990-2020. To achieve this, we specify a panel model that we estimate using the generalized method of moments. The results show that migrant remittances reduce public debt in Africa in such a way that a 1% increase in the level of RFM would allow a 0.015% reduction in the level of public debt of African countries. Indeed, RFM can reduce public debt levels by broadening the country's tax base, by increasing foreign exchange earnings and by misaligning the exchange rate, depending on whether or not the country's currency is pegged to a foreign currency. We recommend that decision-makers set up incentives for formal remittances via digital channels, in particular by simplifying costs and procedures, and pursue policies aimed at better inclusion of the diaspora in the realization of major development projects in Africa, with a focus of RFM on productive investments which, combined with local development policies, will in the long term make it possible to have an independent national currency.\u0026nbsp;\u003c/p\u003e","manuscriptTitle":"Can the public debt of African countries be mitigated by migrant remittances?","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2024-02-22 05:26:44","doi":"10.21203/rs.3.rs-3969899/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"a2f8eb03-595c-4aab-804b-1f6716d815d8","owner":[],"postedDate":"February 22nd, 2024","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[],"tags":[],"updatedAt":"2024-04-26T09:30:35+00:00","versionOfRecord":[],"versionCreatedAt":"2024-02-22 05:26:44","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-3969899","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-3969899","identity":"rs-3969899","version":["v1"]},"buildId":"qtupq5eGEP_6zYnWcrvyt","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}