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Impact of Migration and Remittances on Economic Growth in Nigeria

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  • Imouokhome Peter Afen-Okhai

    (University of Lagos, Nigeria)

Abstract

Remittance flows have the potential to greatly improve the livelihoods of receiving households by smoothing their consumption and enabling investments back home. They can facilitate economic stability, improve creditworthiness, and attract investments to promote economic growth and reduce poverty rates for recipient nations. From World Bank Statistics, Nigeria was 8th on the list of top remittances from low and middle-income countries. The study has undertaken the investigation of a relationship between economic growth and remittance. The economic growth variable used in this study is proxy by GDP while explanatory variables are remittance, trade openness, foreign direct investment, government expenditure, capital formation. The study also investigated the causality among the variables used in the study. Using The ARDL estimation technique owing to the stationarity of all the variables at both level, first differencing and void of second difference series, the result of this analysis confirmed the presence of long run convergence among the variables under consideration. The short run result was presented was evident that remittance has a positive and statistically impact on economic growth under the period of study. However the result shows that there is presence of a long run convergence among the selected variables and the respective dependent variables. This suggests that there is a presence of long run relationship among the variables in consideration. Having confirmed the presence of long run convergence among the variables under consideration, the short run result was presented above which is evident that remittance have a positive and statistically impact on economic growth under the period of study. The long run estimates reveal that government spending has a positive and significant impact on economic growth. Moreover, it was deduced from the regression result conducted that trade openness and foreign direct investment has a positive impact on economic growth under the period of study. There was found a uni direction between the two variables. It is revealed that remittances does not cause changes in economic growth under the period of study. This was further supported by the regression result of positive relationship between government spending and economic growth under the period of study. It was therefore recommended that the Nigerian government should budget and expend more resources on productive sector of the economy especially on infrastructure which would attract the right Foreign Direct Investment (FDI) into the country and boost more growth. Also, the Nigerian government should set up a body to review the spending and allocation of remittances into the country and an independent commission be set up by the federal government to be saddled with the responsibility of coordinating and harnessing remittance flows into the country.

Suggested Citation

  • Imouokhome Peter Afen-Okhai, 2023. "Impact of Migration and Remittances on Economic Growth in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(8), pages 569-605, August.
    • Handle: RePEc:bcp:journl:v:7:y:2023:i:8:p:569-605
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    References listed on IDEAS

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