Human Capital Flight, Remittances and the Problem of Achieving Sustainable Economic Growth in Africa

International Journal of Research and Innovation in Social Science (IJRISS) | Volume III, Issue III, March 2019 | ISSN 2454–6186

Human Capital Flight, Remittances and the Problem of Achieving Sustainable Economic Growth in Africa

Samuel B. Adewumi¹, Chinedu J. Ogbodo², James E. Onoh^3
1,2,3Department of Economics, University of Nigeria, Nsukka

Abstract:- The research employed data from twenty African countries namely: Nigeria, Ghana, Benin, Senegal, Niger, Cote d’Ivoire, Gambia, Rwanda, Tanzania, Sudan, Kenya, Ethiopia, Tunisia, Morocco, Egypt, Algeria, Zambia, South Africa, Namibia and Mozambique; and with variables such as real GDP, stock of physical capital, labour force, remittances received, per capita income, human capital flight-proxied by net migration, education-proxied by secondary school enrolment and technology- proxy by total factor productivity. The data were collected for the rage of 40 years (1977-2016). The result shows that remittances, per capital income, labour force, stock of physical capital, education and total technology exert positive relationship with economic growth, while human capital flight shows non-significant relationship with economic growth. We therefore recommend proper channeling of remittances in productive activities, as remittances can serve as compensation for human capital flight.

Key world: Remittances, Human capital flight and economic growth

I. INTRODUCTION

The problem of human capital flight has reached quite disturbing proportion in LDC’s with African countries in exceptional andthis tends to be more detrimental in the LDC’s because of weak institutional framework (Lalla; 2012). Though some research in the middle-income countries proved that brain drain generates higher income which helps in ameliorating poverty, improves health, educational outcomes, as well as promoting the economic development of those regions (Schiff andOzden, 2007; Görlich and Trebesch, 2008;Sherr et. al., 2012; Adela and Dietmar; 2016).
Riccardo (2006) in their analysis strongly disagreed with the ‘augmentedeffects’ of remittances, as the researchers show that the argument that the negative impact of brain drain could be mitigated by its favorable effect on remittances was not generally true. He showed that brain drain is associated with a lower rather than a larger flow of remittances.Other researchers like Banga and Sahu (2010) further argued that regardless of the usage of remittances – either for investment, consumption or in purchasing other assets – it has a positive impact on economic growth of the source countries by enhancing aggregate demand for goods and services.

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