ABSTRACT

 This thesis focuses on Remittances, Financial deepening and economic growth in Nigeria. The linkage between economic growth, remittances and financial deepening is having a very significant phenomenon in economics literature. In the recent past, remittances have grown rapidly to form a significant component offoreign inflows to Nigeria. Most empirical studies have concluded that increase in International Remittances will granger cause financial deepening which will in turn accelerate economic growth. However, in the developing countries such as Nigeria, the link between remittances, financial deepening and economic growth seems to be ambiguous at best. The fact that remittances might affect financial deepening in developing countries is based on the concept that money transferred through financial institutions gives access for recipients to other financial products and services, which they might not have otherwise (as outlined by Orozco and Fedwa,2005). Remittances played a significant role in other developing economies both as financial support for relatives and also from the viewpoint of expenses for consumption and investment realized from resources related to remittances. This study therefore sought to establish the impact of international remittances and financial deepening on the economic growth of Nigeria (1985-2016). The work used one measure of financial deepening; financial development index measured using bank credit to private sector. The result suggests the existence ofunidirectional causality from economic growth to financial development using bank credit to private sector. It further found a positive and statistically significant relationship between remittances and financial deepening in Nigeria. Moreover, the interaction coefficient between remittances and financial sector development was found to be positive and statistically significant. This result suggests that remittances can complement the allocation of capital credit markets to private investment | activities in Nigeria, also there is need to adequately deepen the financial system through innovations, adequate and effective regulation and supervision, efficient mobilization offunds and making such funds available for productive investment and improved services.