GASPRO International Journal of Eminent Scholars

ABSTRACT
The few existing studies on the impact of remittances on fiscal sustainability have been
observed to be country-specific. This is an attempt to improve on that by examining the
impact of remittances on fiscal sustainability using sub-Saharan African countries as a case
study with a study that cuts across several countries. The scope of the data of the study
ranges between 2006 and 2019. The study adopted the Panel Generalized Method of
Moments (GMM) for the empirical analysis of the study. The model is said to cater to the
problem of endogeneity. The study makes use of four different models for data estimation.
The study found out that foreign direct investment has a positive and statistically significant
impact on remittance in Sub-Saharan African countries. The findings of the study have also
revealed that remittance has a positive and statistically significant impact on the tax revenue
as a ratio of the GDP in sub-Saharan African countries. The study also recommended
policies such as an expansionary fiscal policy to stimulate household consumption
expenditure which will in turn have a positive effect on tax revenue. The study also
recommended that government should attract more remittances to foster higher and
inclusive growth in the migrant's home countries through investment in governmentsponsored bonds and the stock market.
KEYWORDS: Remittances, Fiscal sustainability, GMM, Tax Revenue