Impact Of Remittances On Economic Growth In Nigeria

ABSTRACT

This study seeks to examine the impact of remittances on economic growth in Nigeria, the study made use of the following theories like solow neoclassical theory of economic growth, Solow’s theory of economic growth provides a useful framework for analyzing growth drivers.  The study conducts a unit root test and co-integration test to ascertain the level of integration of the variable and whether or not they are co-integrated. The result from the test guided the researcher on the appropriate modifications on the model to avoid spurious regression. The study was conducted other pre-tests and posttests such as the normality test, the unit root test, serial autocorrelation using the Breusch- Godfrey serial correlation LM test, heteroscedasticity using Breusch-Pagan-Godfrey heteroscedasticity and stability test using CUSUM test. The study explores the aggregate impact of remittances on economic growth using Autoregressive Distributive Lag (ARDL). Alsothe study also covers a period of 38 years (1981-2019) and the data was sourced from the CBN statistical bulletin and World Bank world development indicators. E-view 10 statistical package will be used for the analysis. The following findings was made that there is an increase in remittance inflow will lead to an increase in economic growth in the period under review, that school enrolment was found to have a positive and statistically significant impact on economic growth in the period under review, the model indicate that there is an inverse and statistically significant relationship between economic growth and remittances and gross fixed capital formation was found to have a negative and insignificant impact on economic growth at lags zero and one. Based on the above findings the following recommendations were made that government should promote policies that favor remittance inflow into the country through official channels for proper documentation, that government have to put in place well-articulated  policies that encourage remittance inflow through the formal financial institutions by blocking leakages in the financial system and that remittance inflows must be invested in the productive sector so as to positively impact on economic growth.