Impact of remittances on economic growth in Nigeria: Further evidence
Southwestern University Nigeria, Okun-Owa, Ogun State, Nigeria; University of Ibadan, Ibadan, Nigeria
This paper investigated the relationship between remittances and economic growth in Nigeria, using an error correction modeling approach for the period 1981 to 2011. Our result revealed that remittances positively impact on the economic growth of Nigeria. We have found that a 1 percent increase in remittances would lead to a 0.19 percent increase in the RGDP in the long run. However, remittances show a significant negative relationship with output in the short run. Also, while foreign aid as an external source of capital can have both short and long term significant influence on economic growth in Nigeria, its counterpart FDI can only exert positive impact on RGDP in the short run. Our result also affirmed the significant positive role of trade in promoting economic growth, suggesting that the more open the economy, the more stimuli it has on RGDP both in short run and long run.