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The Impact of Remittances on the Economic Growth of Nigeria

Research Paper (undergraduate) 2017 76 Pages

Politics - International Politics - Region: Africa

Summary

Remittance, due to its size and impact, has become a new phenomenon in the global financial system. Data from World Bank revealed that total remittance in 2015 was $21.1 billion compared to $947 million in 1996, this represents a growth of over 2000 percent over the period. This is what necessitated the need to investigate the impact of remittance on economic growth in Nigeria. The broad objective of the study is to determine the impact of remittance on economic growth in Nigeria. This study employed annual secondary data covering the period 1996 to 2015. Data sources included Central Bank of Nigeria Statistical Bulletin and World Development Index data publications. Data collected were analyzed using Ordinary Least Squares to analyze the relationship between the dependent variable Real Gross Domestic Product (GDP) and independent variables Official Remittance (REM), Gross Fixed Capital Formation (GCF), Official Development Assistance (ODA), Foreign Aid (AID), Foreign Direct Investment (FDI) and Exchange Rate (EXR). Official Remittance, Gross Fixed Capital Formation and Exchange Rate all had positive and significant impacts on economic growth captured by Real Gross Domestic Product while Foreign Aid, Official Development Assistance and Foreign Direct Investment had insignificant impacts on economic growth. This study concludes that remittance significantly has a positive impact on economic growth in Nigeria. Since a positive and significant relationship has been established between remittance and economic growth, this study recommends government increases remittance inflows into the country by developing the financial sector in order to reduce the cost associated with the inflow of remittances and reduction of tax rate for transactions so people can send money through appropriate channels in order to aid government collect actual data on remittance flows.

Details

Pages
76
Year
2017
File size
939 KB
Language
English
Catalog Number
v374311
Institution / College
University of Lagos
Tags
impact remittances economic growth nigeria

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Title: The Impact of Remittances on the Economic Growth of Nigeria