The Effect of Foreign Remittance On Socio - Economic Development in Ethiopia

Foreign remittance is one of the vital sources of foreign currency earning for developing country. It provides undeniable financial support to remittance recipients" households to reduce poverty and improve the life style of the households. Furthermore, it also suppliesstrength to households to develop saving habit, investment for capital formation and in general, accelerate the socio-economic developments of recipients" households. This study attempts to evaluate the effect of foreign remittance on socio-economic development of remittance recipients" households living in Dire Dawa Region primarily in four selected study areas. The paper uses data collected from four kebeles recipients" households living in the region to analyze the effect of foreign remittance on the socio-economic condition of recipients" households. The research investigatedalso whether the effect of remittance is an accumulation of wealth or creating better opportunity to the remittance recipient household to get better social service and so on. Using the collected data, the researcher found that remittance has positive effect on socio economic development. The result further provided evidence that there is an investment resulted from remittance at household level (Micro) and this indirectly indicate to the researcher that remittance contribute necessary efforts through creating stable microeconomic environments.