MACROECONOMIC DETERMINANTS OF WORKERS’ REMITTANCE FLOW TO GHANA

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ABSTRACT

Remittance flow to Ghana have been growing rapidly in recent times, making it one of the largest sources of financing which are unrequited. This research work analyzes the macroeconomic determinants of worker remittance to Ghana using vector error correction model (VECM) and finds out that growth of remittance in recent times to Ghana could be explained by both the host country’s economic condition as well as the home country’s economic situation. It was however, not clear if indeed, remittance was countercyclical – that is, during periods of nadir economic growth in Ghana remittances turn to decline. Altruistic motive dominate the notion for which people living outside Ghana remit home. All the variables in the VECM estimation were found to be of economic relevance in elucidating remittance flow, even though average unemployment rate was not statistically significant.

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