International Remittances and GDP Growth in Nigeria
Keywords:
remittances, FDI, GMM, financial sectorAbstract
In developing countries, remittance from citizen working outside their countries contribute in explaining the behaviour of their home country’s economic growth. Nigeria like any other developing nation,international remittances are considered second largest source of finance after FDI. Remittances and GDP growth in Nigeria has been analysed for the period from 1970 to 2014. Using the Generalized method of moments (GMM) to control endogeniety problem and to also handle unobservable effects. The study showed that remittances are positive as well as significant with GDP growth and also plays an active role in explaining the Nigeria’s economic growth. Also, financial sector’s impact on GDP growth is positive and significant as well as trade openness and world growth GDP. The policy recommendation based on this research finding is that, the financial sector should be improve and be encouraged with necessary legal framework and some basic infrastructures to facilitatethe smooth and horizontal transaction of remittances and also for this sector to perform the role of productive investment.
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