DETERMINANTS AND IMPACT OF REMITTANCES ON THE NIGERIAN ECONOMY: 1996-2009
DETERMINANTS AND IMPACT OF REMITTANCES ON THE NIGERIAN ECONOMY: 1996-2009
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Date
2012-11
Authors
OSARENSE, EDOMWONYI-OTU
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Abstract
Remittances, over the years have become a topical issue globally because of its phenomenal
volume and its potential to serve as an alternative source of development finance in a nation’s
economy. The growing importance of remittances as a source of foreign exchange is reflected in
the fact that they have outpaced foreign direct investment and official development assistance to
Nigeria in recent years. In order to investigate the impact of remittances on economic growth in
Nigeria and its macroeconomic determinants, the Regression and VEC models were used in
carrying out the analysis using quarterly data from 1996-2009. Variables included in the
Regression model are GDP, remittance, foreign aid, investment in physical and human capital,
portfolio investments, degree of openness, FDI and institutions, while for the VAR, remittances,
real agricultural GDP, exchange rate and inflation were used. We found remittances have a
positive and significant impact on economic growth and real agricultural GDP, exchange rate
and inflation determine remittances inflow in Nigeria. Finally we found that Nigerians in
diaspora are motivated to remit for investment and altruism motives. The main policy
implications from this study are that Nigeria can improve her economic growth performance by
strategically harnessing the contributions of remittances for economic development.
Description
A THESIS SUBMITTED TO THE DEPARTMENT
OF ECONOMICS FOR THE REQUIREMENT OF
AWARD OF MASTERS OF SCIENCE IN ECONOMICS
(M.Sc)
AHMADU BELLO UNIVERSITY,
ZARIA
November, 2012
Keywords
DETERMINANTS, IMPACT, REMITTANCES, NIGERIAN, ECONOMY, 1996-2009