Abstract
For economic growth and development in any WE African country the GDP progress is depending on the key push-pull factors as migration, personal remittances received, bilateral aids and, absolutely, employment in agriculture which is about 1/3 of the population and not a predominant and protected minority as happens in the industrialized EU and North America. In order to represent the framework of the reciprocal dependencies the present study used the statistics of Gambia from WDI covering the periods from 1960 to 2017 by applying linear regression models. The results confirmed that migration and remittances have significant positive impact on employment in agriculture because new investment in agriculture created new skilled and unskilled employment. The results also found out that employment in agriculture has negative and significant impacts on foreign aids: 10% increase in migration, increases foreign aid by 50.3%. Increasing 10% of remittance, increase economic growth by 0.14% but 10% increases in employment in agriculture, decrease economic growth by 0.04%. To face globalization the economy of the Gambia should use the foreign aid to improve agriculture production and productivity thereby increase economic growth through human capital theory of migration, skilled migration, export and food security, the study recommends.
Author Contributions
Copyright© 2020
K. Ceesay Ebrima.
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Introduction
The population of the Gambia is almost 2 million inhabitants, and one of the smallest and smiling coast countries in West Africa. Thus, it is smallest, but illegal and legal ways of migration shows a major part in the society of Gambia. The contribution of agriculture is not that big compare to other sectors at 1/3 of the GDP of Gambia. This may be due to the fact that agriculture share of GDP lead to lower rainfall, high temperature. In the Gambia, less than half of the arable land is cultivated in the Gambia. The Gambia produces mainly peanuts, rice, millet, sorghum, corn, sesame, cassava, palm kernel, cattle, sheep and goats In Gambia, only less than 20% of the proposed budget for 2020 was allocated to agriculture. This cannot do anything for adaptation and mitigation strategies for the existing and future agricultural development. The development intervention (proxy employment in agriculture) is developed by IOM of Gambia in order to facilitate, protect, reintegrate and assist the migrants that were returned. The returnee benefits lots of facilities such as skills transfer, soft skills given. Personal remittance received have positive and significant impacts on economics in Gambia by using Vector error correction model both in the short run dynamics and in the long run Sources: Retrieved from FRED Economic data, World Bank October 2019 For Berthélemy, et al. In this study, the secondary data were collected from WDI. After the data was cleaned up and arranged in excel format. The ID was selected to fill the missing values by using interpolation. The results from the data were imported into Eview, R and Stata. As indicated in
DATE
Percentage of Gambians' remittance of GDP
1/1/2006
9.74
1/1/2007
6.97
1/1/2008
6.97
1/1/2009
8.86
Materials And Methods
Linear regression is a technique to quantify the relationship between the dependent variable and only one independent variable y = β0 +β1x In this equation, y is the dependent variable, is the variable on the vertical axis of the graph or the explained variable, while x, represents the variable on the horizontal axis or the independent variable. The value β0 (which can be negative, positive or zero) is called the intercept, while the value β1 (which can be positive or negative) is called slope or coefficient of regression or rate of change. Both, β 1 and β0 can be calculated from the following equations: This paper is based on multiple regression analysis in which two or more variables are modeling and analyzing. The multiple regression analysis is to describe the relationship between one dependent variables called response variable and several independent variables called exogenous variables7,8, identified that and at the same time the spreads in which some independent variables have on the dependent variable. The multiple regression models can be much more accurate than the mono-factorial regression model. In our study, the dependent variable for the multiple regression analysis is development intervention (employment in agriculture) and the independent variables are net migration, net official aid received, economic growth, and net official development assistance and official aid received. All of the variables were used for the analysis throughout the periods from 1969-2016. Data were collected from WDI and used to obtain the regression equation and calculate the standard error, the t-statistic, the p-value and the R-squared. All these variables measure the goodness of fit or accuracy of the estimates of the model, especially the R-squared, which is called coefficient of determination in which the proportion of how much the total variance is explained by the independent variables in the model. Other tests were also used like F- statistic, t-ratios and p-values to test the hypothesis and indicate the rejection region in the model with degrees of freedom. If y is a dependent variable and x1,…, xk are independent variables, then the multiple regression model provides a prediction or forecast of y given xi of the form Where the assumption on the error terms are exactly as in simple linear regression. In order to estimate the coefficients and se (standard error of the estimate), one follows a process very similar to that followed in the case of only one predictor value. The left hand size variable is the dependent variable and the right hand size variable is the independent variables. The paper used the multiple regression analysis to direct predict the values of development intervention (employment in agriculture) to migration in Gambia. Do aid/development interventions/personal remittance affect irregular migration specifically? This is linear regression between aid and net migration and between development intervention and net migration decision and between personal remittances received and net migration. Does net migration affect total bilateral aid received in Gambia? Does personal remittance received affect net migration? Do personal remittances received affect economic growth? Does net migration affect economic growth? Does net migration impacts on development intervention, when we considered employment in agriculture as a proxy for development intervention? Does development affect aid? Does aid affect economic growth? Multiple linear regression models between development intervention (proxy agriculture employment), net migration, personal remittances, bilateral aids and economic growth are given below. Do the net migration, net official aid received, personal remittances received and economic growth affect development intervention (employment in agriculture)? Does aid affect personal remittances received, net migration, development intervention and economic growth? Does net migration affect personal remittances received, aids, development intervention and economic growth? NMit Do personal remittances received affect net migration, aids, development intervention and economic growth? Where: EADI: Development Intervention (Proxy employment in agriculture) NM: Net migration EG: GDP growth Taid: total aid which is Net bilateral aid flows from DAC donors, United States+ Net bilateral aid flows from DAC donors, European Union institutions+ Net official development assistance and official aid received. PR: Personal remittance received A brief descriptive of the data, the name of the variables, data sources and comment used in this study are presented in the
Name of Variable
Source
Comment
GDP Current(US$)
WDI
Current GDP
Net Migration
WDI
Net migration
Personal remittance received
WDI
Personal remittance received($)
Employment in agriculture
WDI
Employment in agriculture
Bilateral aid
WDI
Bilateral aid received
Results
For all the following tests, 0.05 level of significance was used. The decision rule is: If the value of the probability is higher than the 0.05 level, then we accept the null hypothesis H0 .If the value of the probability is smaller than the 0.05 level, and then we reject the null hypothesis H0. To test the correlation, the test of hypothesis is as follows: H0 : X and Y are not correlated and Ha : X and Y are correlated. In the Sources: Author’s own computation by retrieved data from World Bank Using Eview 10 From Sources: Author’s own computation by retrieved data from World Bank Using Eview. From Sources: Author’s own computation by retrieved data from World Bank Using Eview Though, foreign aids increase the economic growth in most of the poor countries if aids are the only sources of funding. If total bilateral aids received are utilized in good way, it can be an important sources of income to reduces poverty and improve economic development of Gambia. As the results generated in Sources: Author’s own computation by retrieved data from World Bank Using Eview The results from Sources: Author’s own computation by retrieved data from World Bank Using Eview The study confirmed that the total aids, employment in agriculture and economic growth has significant impacts on remittance. From the existing literatures, migration and remittances have both direct and indirect effects on the welfare of the population in the migrant sending countries. There is empirical evidence that remittances contribute to economic growth, through their positive impact on consumption, savings, and investment in macroeconomic. Remittances can also have negative impact on growth in recipient countries by reducing incentives to work, and therefore reducing labor supply. From
Covariance Analysis: Ordinary
Sample: 1960 2017
Included observations: 58
Correlation
Probability
EADI
EG
NM
PR
TAID
EADI
1.0000
EG
1.0000
NM
0.141
0.0574
1.0000
PR
-0.726
0.299
-0.580
1.000
TAID
-0.718
0.320
-0.260
0.657
1.000
Dependent Variable: EG
Method: Least Squares
Sample (adjusted): 1960 - 2017
Included observations : 58 after adjustments
Variable
Coefficient
Std. Error
t-Statistic
Prob.
C
-5.837
2.718
-2.147
0.03**
PR
1.099
0.467
2.349
0.02**
Dependent Variable: EG
Method: Least Squares
Sample (adjusted): 1960 2017
Included observation: 58 after adjustments
Variable
Coefficient
Std. Error
t-Statistic
Prob.
C
-1.832
2.235
-0.819
0.4158
NM
5.05E-05
0.000117
0.43053
0.6685
Dependent Variable: EADI
Method: Least Squares
Sample (adjusted): 1960 2017
Included observations: 58 after adjustments
Variable
Coefficient
Std. Error
t-Statistic
Prob.
C
31.255
0.168
185.883
0.0000
NM
9.4E-06
8.8E-06
1.067
0.2904
Dependent Variable: taid
Method: Least Squares
Sample (adjusted): 1960 2017
Included observations: 58 after adjustments
Variable
Coeff.
Std. Error
t-Statist
Prob.
NM
503.446
443.0
1.136
0.2608
EADI
770450.
372676
2.067
0.04**
EG
411198.
439147.1
0.936
0.3533
PR
1033062
1890886
5.463
0.0000
Discussion
One of the studies that looks at the impact of migration on economic growth for 22 OECD countries between 1986 and 2006 proved an optimistic, but small impact of the human capital brought by migrants on economic growth. The involvement of immigrants to human capital accumulation tends to counteract the impact of population increase on capital per worker, but the net effect is fairly small. An increase of 50% in net migration of the foreign-born makes less than one tenth of a percentage point difference in productivity growth Thus, remittances improve the likelihoods of reduction in poverty, increases education enrolment, improve investment, decreases food in-security, improve health. The results confirmed that remittances benefits both individuals, entire countries and the continents like in sub-Saharan Africa, Asia etc. In their parts, Galiani, et al. A cross-country study of 71 developing countries found that a 10% increase in per capita, official international remittances will lead to 3.5 percent decline in the share of people living in poverty Migration is a choice that influences the welfare of the household, the home community, and in the end the whole economy in various ways
Gambia, The
1960
540000
33.979
-0.46316
-67.033
2033.6
Gambia, The
1961
1430000
33.85
-0.42626
-57.4569
3657.8
Gambia, The
1962
2550000
33.721
-0.38937
-47.8807
5282
Gambia, The
1963
5120000
33.592
-0.35248
-38.3046
6906.2
Gambia, The
1964
2550000
33.463
-0.31559
-28.7284
8530.4
Gambia, The
1965
4370000
33.334
-0.2787
-19.1523
10154.6
Gambia, The
1966
3850000
33.205
-0.24181
-9.57614
11778.8
Gambia, The
1967
3270000
33.076
-0.20492
0
13403
Gambia, The
1968
6260000
32.947
-0.16803
9.576144
13603
Gambia, The
1969
4670000
32.818
-0.13113
2.435523
13803
Gambia, The
1970
1310000
32.689
-0.09424
6.153847
14003
Gambia, The
1971
4530000
32.56
-0.05735
-0.06588
14203
Gambia, The
1972
5880000
32.431
-0.02046
0.241705
14403
Gambia, The
1973
7440000
32.302
0.016432
9.250329
14438.4
Gambia, The
1974
12200000
32.173
0.053323
5.878794
14473.8
Gambia, The
1975
8850000
32.044
0.090214
12.39343
14509.2
Gambia, The
1976
12330000
31.915
0.127106
7.351226
14544.6
Gambia, The
1977
22480000
31.786
0.163997
3.439576
14580
Gambia, The
1978
38280000
31.657
0.200889
6.316446
14640.6
Gambia, The
1979
42380000
31.528
0.23778
-1.32818
14701.2
Gambia, The
1980
66060000
31.399
0.162154
6.27008
14761.8
Gambia, The
1981
86120000
31.27
0.132274
3.321894
14822.4
Gambia, The
1982
58770000
31.141
0.08693
-0.76458
14883
Gambia, The
1983
48390000
31.012
0.328483
10.88323
24025.8
Gambia, The
1984
65790000
30.883
0.867147
3.535257
33168.6
Gambia, The
1985
60220000
30.754
1.40581
-0.81226
42311.4
Gambia, The
1986
1.21E+08
30.625
1.944473
4.091071
51454.2
Gambia, The
1987
1.21E+08
30.496
2.483137
2.454333
60597
Gambia, The
1988
1.03E+08
30.367
3.0218
4.476827
49001.6
Gambia, The
1989
1.16E+08
30.238
3.560464
5.895722
37406.2
Gambia, The
1990
1.15E+08
30.109
4.099127
3.558879
25810.8
Gambia, The
1991
1.15E+08
29.98
4.637791
3.107039
14215.4
Gambia, The
1992
1.34E+08
29.851
5.176454
3.378689
2620
Gambia, The
1993
1.06E+08
29.847
5.715117
3.012101
1182
Gambia, The
1994
87510000
30.405
6.253781
0.154346
-256
Gambia, The
1995
54770000
30.689
6.792444
0.881848
-1694
Gambia, The
1996
42520000
30.329
7.331108
2.223546
-3132
Gambia, The
1997
45510000
30.458
7.869771
4.899999
-4570
Gambia, The
1998
51580000
30.218
8.408434
3.499999
-3352.6
Gambia, The
1999
39500000
30.484
8.947098
6.399999
-2135.2
Gambia, The
2000
60440000
30.301
9.485761
5.5
-917.8
Gambia, The
2001
58320000
30.387
10.02443
5.8
299.6
Gambia, The
2002
73390000
30.988
10.56309
-3.25
1517
Gambia, The
2003
70740000
30.929
11.10175
6.87
-1873.6
Gambia, The
2004
68060000
30.905
6.315495
7.05
-5264.2
Gambia, The
2005
64710000
31.451
5.770552
-2.35173
-8654.8
Gambia, The
2006
81310000
30.959
6.049967
-0.55558
-12045.4
Gambia, The
2007
1.08E+08
30.718
4.349639
3.04325
-15436
Gambia, The
2008
1.17E+08
31.083
4.149896
6.255906
-15436
Gambia, The
2009
1.45E+08
30.883
5.502995
6.665724
-15436
Gambia, The
2010
1.50E+08
30.903
7.496898
5.908336
-15436
Gambia, The
2011
1.76E+08
30.784
6.480762
-8.13044
-15436
Gambia, The
2012
1.62E+08
30.539
7.515829
5.241569
-15436
Gambia, The
2013
1.32E+08
30.23
7.984044
2.872769
-15436
Gambia, The
2014
1.17E+08
30.086
11.20583
-1.40738
-15436
Gambia, The
2015
1.19E+08
29.943
9.865488
4.058074
-15436
Gambia, The
2016
1.01E+08
29.997
14.13313
1.94336
-15436
Gambia, The
2017
3.38E+08
29.94
15.162
4.822611
-15436
Conclusion
When a multiple regression analysis was used, the results confirmed that migration and remittances have significant impact on employment in agriculture in the Gambia. The impact is larger for remittances than migration itself. 10% increase in remittance, increased the employment in agriculture by approximately 0.29%, if other variables remained constant. Bilateral aid has fairly positive significant impacts on employment in agriculture, while economic growth has significant negative impact on employment in agriculture. This is confirmed in the study done by Clemens