Remittances and Economic Growth in Kenya (1970-2010)

Abstract

Statisticshow that remittances to Kenya have been increasing over the years. Studies on the effect of remittances on economic growthin Kenya are limited and have not included private capital inflows as one of the determinants of economic growth. This studyinvestigated the effect of remittances on economic growth in Kenya. Data was sourced for the World Bank's African DevelopmentIndicators and various Economic Surveys and Statistical Abstracts for the period 1970-20 IO. The study used the ordinaryleast squares estimation to determine the effects of remittances on economic growth. The study found that the coefficientof remittances as a ratio of gross domestic product was positive and significant. The Government of Kenya should putinplace policies that encourage remittances.