Effect Of International Remittance On Financial Sector Development In Nigeria:- Onuoha Mercy C

ABSTRACT The study investigated the effect ofInternational remittances on financial sector development in Nigeria for the period 1981-2018 with specific objectives namely; to determine the effect of International remittances on financial sector development in Nigeria and to determine ifthere exists a long run relationship between international remittance andfinancial sector development in Nigeria. The specified model was estimated using the Autoregressive Distributive lag Model to determine the level of impact that one variable has on the other. While E-views 10 statistical software was employed in computing the result, time series data were obtainedfrom World Bank national accounts data and OECD National Accounts data files and the study established that Remittances (LREM) had a negative relationship with CPS/GDP in 1st and 2nd lag periods, but had apositive relationship with CPS/GDP in the long run butstatistically insignificant at 5% level ofsignificance, Consumer Price Index (CPI) had a positive relationship with CPS/GDP in the in the current year and in the long run period, Official Exchange Rate (OEXCR) had a positive relationship with CPS/GDP in the current year but had a negative and insignificant relationship in the long run and the study recommended that remittance receivers who have not opened an account can be convinced to open and operate one. Another way ofimproving thefinancialsector through remittances is to allow morefinancial transfer agents as is dine in the western world. The existingfinancial transfer agents appear oligopolistic and hence reduce the efficiency gain and increase dead weight loss by making cost of transfer relatively costly for the remitter while the intermediary reap all the benefit oftransfer.