Migrant remittances drive private investment growth in African countries.
Migrants' money sent back home can help boost private investments in African countries. A study looked at 28 countries in Africa from 1995 to 2017 and found that when the investment climate is good, more remittance money goes into investments. Specifically, when the government is efficient and the market is open, private investments grow. However, if remittance money exceeds 78% of the total, private investments start to decrease. To improve private investments, policymakers should focus on making markets more efficient and improving government policies like taxes and finances.