FOREIGN REMITTANCE AND ECONOMIC GROWTH IN NIGERIA

ABSTRACT

This study aims to investigate the dynamics of economic growth in Nigeria, with a focus on the role of foreign remittances, money supply, exchange rate, and inflation rate as component variables. The research is crucial in understanding the broader economic implications of foreign remittances in a developing country context. The study uses secondary time series data covering the period 1994 to 2022. This study used descriptive statistics, correlational and regression analysis to analyze the data. The descriptive statistics are used to describe the data set using the mean, maximum and minimum values, standard deviation, skewness, kurtosis, and the Jarque-Bera statistic. Skewness, kurtosis and the Jarque-Bera statistics are use to explain the distribution properties of the data. The correlation analysis is used to determine the linear relationship between the variables pair wisely. The Ordinary Least Squares (OLS) technique is used to determine the effect of the explanatory variables on the outcome variable. The empirical result revealed that foreign remittances have a significant impact on economic growth in Nigeria. It was found that money supply has a positive significant impact on economic growth in Nigeria It was discovered that exchange rate has a positive significant impact on economic growth in Nigeria. The study found that inflation rate has an insignificant impact on economic growth in Nigeria. The study recommends amongst others that government should come up with appropriate monetary policy measures backed up with implementable strategies to encourage workers living abroad to repatriate their money home to boost economic growth in Nigeria. The monetary authority should stabilize the exchange rate by encouraging remittances inflow by reducing the cost of remittances transfers to the country.