Abstract
M.Phil.
Global capital inflows particularly foreign direct investment, official development assistance and portfolio flows, have over time, played a prominent role in strengthening developing economies. There is, however, a recent phenomenon in which migrant remittances have turned out to be the leading source of capital inflows to developing countries after foreign direct investment. Remittance flows have reacted largely to an increasing international migration, albeit more rapidly than the latter. It is observed nevertheless that in the case of South Africa, the impact of neither of the two phenomena on economic development is least understood. This formed the basis for this study.
The study aims to sensitise policy officials to the positive potential impacts of remittances on economic development whilst also arguing that international migration is an exogenous phenomenon that cannot be prohibited. However, it is a source of a much needed resources, provided realistic instruments are in place to examine, monitor and ensure that remittances are used appropriately. The study is empirical and is based on the literature review on the subjects of remittances and migration. The research has consistently demonstrated that remittances improve economic development. It is within this context that South Africa should, as a matter of urgency, develop an effective policy framework to influence remittances for development.