EFFECT OF FOREIGN REMITTANCES ON HOUSEHOLD WELL-BEING IN ECOWAS

Abstract

This study examines the role of foreign remittances in promoting household well-being across the Economic Community of West African States (ECOWAS) over the period of 1990 and 2025. Despite the growing importance of remittance inflows as a source of external finance, evidence on their long-run welfare effects in the region remains mixed. Using panel Fully Modified Ordinary Least Squares (FMOLS), the study estimates the long-run relationship between foreign remittances and household well-being while controlling for relevant macroeconomic factors. The findings indicate that foreign remittances exert a positive and statistically significant effect on household well-being by enhancing income, supporting consumption and improving access to essential services. The results suggest that policies aimed at reducing remittance transfer costs, strengthening financial inclusion and encouraging the productive use of remittance inflows could further enhance welfare outcomes in ECOWAS. The study contributes to the literature by providing updated evidence covering the 1990 to 2025 period and offers policy implications for leveraging remittances as a tool for sustainable development and poverty reduction in the region.