Impacts of Remittance Inflows on Domestic Savings in Kenya
Abstract
Abstract
The main objective of this study was to find out the impacts of remittance on domestic
savings levels in Kenya for the period between 1970- 2011. Secondary data sourced from the
World Bank database and Kenya National Bureau of Statistics was used. The Error
Correction Model (ECM) was used. Empirical results show that GDP per capita, exports and
investment affect domestic savings positively and significantly. Real interest rate does not
have a significant effect on domestic savings. Remittance affects positively and significantly
domestic savings positively. We therefore conclude that remittance inflows affect positively
the rate of domestic savings. We therefore recommend, among others, that government's
effort should be geared towards improving the inward flow of remittances by considering a
favorable tax treatment for migrant investment in securities and offer the same tax treatment
offered to foreign investors for certain classes of investment.
Citation
Master of arts in economicsPublisher
University of Nairobi