The effect of remittances on the Nigerian economy (original) (raw)
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International Remittances and Economic Growth of Nigeria
AE-FUNAI JOURNAL OF ACCOUNTING, BUSINESS AND FINANCE(FJABAF), 2020
The paper investigated the effect of international remittances on the economic growth of Nigeria for the period covering 1986 to 2017. In analyzing the data collected the ARDL approach to cointegration and VECM was adopted to determine the long run and short-run relationships among economic growth, remittances, gross domestic investment, Interest rate, and inflation rate. Findings indicated that in the long run remittances, human capital, and inflation rate had a positive effect while GDI and interest rate had a negative effect on the economic growth of Nigeria. In the short run remittances, human capital, GDI, and inflation rate had a positive effect while interest rate had a negative effect on the economic growth of Nigeria. In view of the findings the study amongst others recommend that Government should put in place facilities and incentives that will make remittances cheaper using the formal channel, also the introduction of new savings instruments as well as providing information on investible opportunities available in Nigeria will ensure remittance are put into productive use. The creation and functioning of the Migrants and Diaspora Office domiciled in the Ministry of Foreign Affairs will serve as a fulcrum in stepping up remittances.
Macroeconomic Drivers of Remittances and the Implication for Economic Growth in Nigeria
Applied Economics and Finance, 2018
Remittances have been one of the officially recorded sources of international flows, especially, to developing economies like Nigeria, hence the need to encourage its consistent flow as well as defining ways and means of redeploying it for an improved economy. Following this line of reasoning, an attempt was made in this study, to see whether the macroeconomic environment in the domestic economy can actually play a role in stimulating international remittance inflows. To achieve this, average remittance data were tested against that of per capita income, real exchange rate, trade openness, government expenditure, inflation rate and the demographic variable (population density), and the data were all from secondary sources (WDI and CBN Bulletin, 2017/2018). Drawing from the type of gravity model suggested by Greenwood (1975) and Borjas (1987, 1989) ¨C as modified - for analyzing international migration, and exploring the two approaches to international remittances analysis ¨C altruis...
REMITTANCE AND THE ECONOMY: THE NIGERIAN EXPERIENCE (A REVIEW
Migration is a basic major component of population dynamics which is characterized by deliberate rational decision of the migrant. This phenomenon has been viewed differently by different people, with some mentioning it as a cause of degradation of rural and urban ecological resources. Some associate the spread of HIV/AIDs and recently the Ebola Virus Disease (EVD). The most positive and powerful outcome of migration is remittance income. The significant contribution of international remittances to the stability and sustainable growth prospects of developing countries cannot be overemphasized. Remittances have not only grown strongly in a positive direction, but these inflows have also exhibited a much more stability than other private capital inflows and Overseas Development Assistance (ODA). Remittances are playing an increasingly large role in the economies of many countries, contributing to economic growth and to the livelihoods of people.
Effect of Remittance Inflow on Economic Growth of Nigeria
Journal of applied and theoretical social sciences :, 2024
This study examines the effect of remittance inflows on Nigeria economy as proxy with gross domestic product (GDP). The research specifically focuses on 41 years from 1981 to 2021, analyzing data from the Central Bank of Nigeria's statistical bulletin and the World Development Index. Through correlation analysis, unit root and co-integration tests, as well as error correction model estimation, the study investigates the relationship between remittance inflows and GDP growth. The results demonstrates that, in the short term, remittance inflows had an insignificant negative effect on Nigeria's GDP growth (-0.337970, p > 0.05). However, in the long run, remittance inflows shows a significant positive impact on the GDP growth rate (1.973835, p < 0.05). These findings highlight the importance of channeling remittances into productive activities within the home country. While short-term inflows may not contribute significantly to economic growth, sustained and increasing remittance inflows can play a crucial role in driving Nigeria's economic expansion. The study recommends the implementation of policies, programs, and systemic reforms to encourage the productive utilization of remittances. It emphasizes the need to ensure that remittances are utilized in ways that contribute to longterm economic growth and development. Furthermore, the study calls for the establishment of measures to prevent brain drain, protecting Nigeria's valuable human capital from being solely driven by financial incentives, which may not be evenly distributed for productive purposes in the short and medium term. These measures will help foster a balanced approach to leveraging remittance inflows for sustainable economic progress in Nigeria.
Foreign Remittance and Economic Performance of Nigeria
The study examines the influence of foreign remittances on the economic performance of Nigeria using time series data for the period 1986-2018. The time-series data was sourced from the World Bank. Error Correction Model (ECM) technique was adopted to determine the impact of foreign remittances on economic performance in Nigeria and how the exchange rate mediates the relationship. From the empirical examination, the paper posited that a reduction in the exchange rate is required for the foreign remittances to effectively influence the performance of the economy of Nigeria. The study, further, concluded that while the foreign remittances improve the performance of the economy of Nigeria, the exchange rate is harming it. The paper, therefore, recommends that the Government of Nigeria needs to overvalue naira and make it stable to boost the effect of the foreign remittances on the performance of Nigerian economy as well as collaborate with the money transfer agents to reduce the cost o...
Revisiting the Effects of Workers' Remittances on Economic Development in Nigeria
Poverty in Nigeria continues unabated despite huge inflow of remittances. Our result supports the argument that remittances can improve economic growth but can also worsen overall wellbeing. Reasons for this are, first, remittances beneficiaries in Nigeria are concentrated in the middle income class with high propensity to consume. Second, due to high propensity to consume, consumption triggers good prices in such a way as to worsen the purchasing power of the poor. Third, institutions are weak and the poor do not benefit from weak institution. Thus good quality institutions should be encouraged while ostentatious spending should be discouraged.
Migrant Remittances and Economic Growth: The Nigerian Perspective
This study focused on diaspora remittances and its effect on economic growth in Nigeria. It sought to assess the signification of diaspora remittances, and to suggest measures that could enhance its effectiveness and economic growth in Nigeria. To achieve the objective of the research, some macroeconomic indicators in the Nigerian economy were evaluated using an ex-post facto research design. The data were collected, analyzed and tested using the Ordinary Least Square (OLS) multiple. From the analysis, it was revealed that there was a significant relationship between total remittances and gross domestic product in Nigeria. Furthermore, workers remittance was found to have an insignificant effect on gross domestic product in Nigeria. Based on the findings, the study recommended that total remittance distribution should always be backed by predictable, sound, and proportionate regulatory framework, in order to stimulate the participation of reputable international financial organizations via risk management practices and good governance. Also, the government of Nigeria should work towards creating a conducive environment that will attract international remittances. Thus, the establishment of migrant office in the Federal and State Ministry of Foreign Affairs, with branches nationwide , will be a good step in the right direction in boosting workers remittance.
International Journal of Management, Economics and Social Sciences, 2019
The purpose of the study was to examine the relationship between remittances, financial sector development, and economic growth in Nigeria over the period 1981 to 2017. The study used the autoregressive distributed lag (ARDL) model to analyze the long-run and short-run relationships between the variables. The outcome of the study revealed that the variables are bound together in the long-run. The results also showed that remittances have a negative and significant effect on economic growth both in the long-run and short-run. The study also established that financial sector development has a negative and significant impact on economic growth both in the long-run and short-run. Further, the study confirmed the existence of complementarity between remittances and financial sector development in influencing economic growth. In addition, study revealed that inflation has a negative and significant effect on economic growth both in the long-run and short-run. The findings of the study showed that trade openness, government expenditure, and population growth have no significant impact on economic growth both in the long-run and short-run.
The Impact of Remittances on Economic Growth in Nigeria: an Error Correction Modeling Approach
Zagreb International Review of Economics and Business, 2014
This paper investigated the relationship between remittances and economic growth in Nigeria, using an error correction modeling approach for the period 1981 to 2011. Our result revealed that in the long run, remittances impact positively on the economic growth of Nigeria. However, remittances show a signifi cant negative relationship with output in the short run. Also, while foreign aid as an external source of capital have both short and long term signifi cant infl uence on economic growth in Nigeria, its counterpart FDI can only exert positive impact on RGDP in the short run. Our result also affi rmed the significant positive role of trade in promoting economic growth, suggesting that the more open the economy, the more stimuli it has on RGDP both in short run and long run. A policy implication which may be drawn from this study is that Nigeria can improve its economic growth performance, not only by investing on the traditional sources of growth such as investment in physical, fo...