Remittances-ecological footprint nexus in Africa: Do ICTs matter?

Abstract

The growth of migrant remittances poses a real challenge in developing countries both in terms of development and the quality of the environment. This paper examines the effect of migrant remittances on the ecological footprint in Africa with taking account the role of Information and Communication Technology (ICT). Unlike previous work that has considered carbon dioxide emissions as a measure of environmental degradation, this study takes into account the ecological footprint as a fair measure of environmental quality. Our sample consists of 30 African countries from 2000 to 2021. We use two methodologies, respectively Two-Stage Least Squares (2SLS) with instrumental variable and quantile for robustness. The results show that remittances contribute to environmental degradation by increasing the ecological footprint. Moreover, taking into account the modified environmental Kuznets curve effect, our results show that more migrants' remittances increase, more they contribute to improving the environment by improving the ecological footprint. Our results remain robust using quantile regression. Moreover, ICTs reduce the adverse effect of remittances on environmental degradation. In addition, the results reveal that urbanization and human capital improve environmental quality but energy consumption damage it in Africa. Besides, reducing remittances costs and considering incentives to increase remittances inflows to the country remains a suitable target under sustainable development. Finally, there is evidence to implement effective financial system to soften investment credits granting intended for clean technology. Households and individuals should minimize their use of remittances to finance carbon-intensive items like automobiles and others. Moreover, is been necessary to improve ICT penetration and his efficiency in the African countries’ context.