The macroeconomic determinants of personal remittances in Sierra Leone

The topic of migration has sparked an intense debate in the field of academia and policy discourses. Many have argued that it leads to a brain drain syndrome, while others have strongly supported its relevance for economic growth through inward personal remittances worldwide. The substantial flow of remittances and its less volatile nature compared to the other forms of international capital inflows to many countries has made remittances a dependable engine for economic growth. Sierra Leone still hugely depends on international capital inflows to achieve its development goals. Despite this reality, there is no study to the author's knowledge on this important topic in the country. Thus, this study uses a combination of econometric estimation techniques to ascertain the macroeconomic variables determining personal remittances in Sierra Leone and the causality among the variables in the period 1980 – 2018. The study found out that economic growth, broad money, age dependency ratio, war, and Ebola negatively influence personal remittances in the country, whereas inflation exerts no significant influence on it within the study period. Also, Granger causality running from economic growth to remittances was confirmed, whereas no causality between the other variables and remittances was found. The study, therefore, suggests that the government should implement pro-growth macroeconomic policies and keep inflation within reasonable limits. This stable macroeconomic environment would attract more remittances for investment purposes and reduce the negative impacts that could result from a pure altruism motive of remittance thereby resulting in sustainable remittance inflows and economic development in the country.