Propelling growth from a distance: How remittances support private sector job creation in developing economies through growth (the case of the Gambia)

This thesis extensively explores the multifaceted relationships between migrant remittance inflows and private sector growth and eventual job creation in the Gambia between the years of 1999 and 2020. The study actuates this aim by employing private sector growth (proxied by claims on private sector) remittance inflows as the dependent and independent variables respectively and foreign exchange and political stability as the controlled variables. Utilizing a VECM empirical analysis approach, the study investigates the influence of the vast amount of remittances into the Gambia (38% of the GDP) on private sector growth and job creation while controlling for political stability and foreign exchange fluctuations. The analysis revealed a long-run positive relationship between remittance inflows and private sector growth and employment creation in the Gambia. A FEVD and IRF analyses were also executed to provide greater feedback on the response of the private sector to shocks in remittance inflows, political stability and exchange rates. These tests professed that, foreign exchange rates have the greatest ability to explain variances in the private sector (about 38% in the 10th period). The paper includes an introductory section; where the key concepts in the research are briefly discussed, an analysis section; where the employed methods are explained, analysis evaluated and interpreted and a concluding section; where the findings and recommendations of the paper are presented. These findings underscore the importance of the enactment of tailored remittance enhancement policies that account for the roles of political stability and exchange rates to maximise the long-run positive influence of remittances on private sector growth and ultimate employment generation.