On the Sustainable Economic Growth in Sub-Saharan Africa: Do Remittances, Human Capital Flight, and Brain Drain Matter?

• Published in: Sustainability Vol. 14; no. 4; p. 2117
• Main Authors: Usman, Mohammed A. M., Ozdeser, Huseyin, Çavuşoğlu, Behiye, Aliyu, Umar Shuaibu
• Format: Journal Article
• Language: English
• Published: Basel MDPI AG 01.02.2022
• Subjects: Altruism; Brain; Brain drain; Consumption; Convergence; Corruption; Diaspora; Economic development; Economic growth; Economics; Employment; Error correction; Flight; Human capital; Income inequality; International finance; Labor market; Low income groups; Poverty; Remittances; Social networks; Social organization; Statistical analysis; Sustainability; Sustainable development; United States > US; Sub-Saharan Africa; Africa
• DOI: 10.3390/su14042117
• ISSN: 2071-1050

To solve the active macroeconomic challenges of remittances, human capital flight, and brain drain facing Sub-Saharan Africa (SSA) from the perspective of costs and benefits tradeoffs for achieving Sustainable Development Goal eight (SDGs-8) targets by 2030 and the recipient communities’ wellbeing, this study investigates the sustainable economic growth in SSA: Do remittances, human capital flight, and brain drain matter? Autoregressive-Distributive Lag (ARDL) and the Error-Correction Mechanism (ECM) were used. Thus, this research is led by push–pull, altruism, and social network theories. The ARDL showed that remittances and trade positively affect economic growth. However, human capital flight, poverty, corruption, and inequality negatively affect economic growth. The co-efficient of ECTt−1 is ascertained to be negative (−0.266282) with a significant statistical value of 1% (i.e., 0.0123). Therefore, the annual requirement to restore equilibrium convergence is 26.62%. The study concludes that SSA may achieve their sustainable economic growth target, particularly by formalizing remittances and human capital flight and brain drain into the financial, economic system in SSA by 2030, since restoration to long-term convergence will take less than nine years. Enabling a labor market that offers decent work and wages, along with trade and remittance policies for sustainable growth, are recommended.