Diaspora Remittances and Economic Development in Nigeria

Abstract

This study aims to examine the significant impact of diaspora remittances on Nigeria's economic development, specifically focusing on GDP growth, per capita income, and human capital development. By exploring the relationship between remittances and key economic indicators, the study seeks to provide empirical evidence on the role of remittances in driving long-term economic growth and enhancing socio-economic welfare in Nigeria. The study employs an Autoregressive Distributed Lag (ARDL) model to analyze the relationship between diaspora remittances and Nigeria’s economic development. The model is tested using secondary data from credible sources, including the Central Bank of Nigeria and World Bank, spanning the period from 1985 to 2023. The research involves both long-run and short-run analysis, with a focus on error correction modeling. The findings reveal a significant positive relationship between remittances and Nigeria's GDP growth, per capita income, and human capital development. Remittances are shown to stimulate economic growth, reduce poverty, and improve education and healthcare outcomes, reinforcing the positive multiplier effect on the Nigerian economy. This study contributes to the understanding of how remittances can be harnessed for economic growth and development. The results suggest that policies promoting the productive use of remittances in sectors like education, healthcare, and small businesses can boost Nigeria’s long-term economic stability.

Originality/ Value: This study provides original insights into the role of diaspora remittances in Nigeria's economic growth, offering valuable recommendations for leveraging remittance inflows for sustainable development.

Keywords:       diaspora remittances, GDP growth, per capita income, human capital development, Nigeria.