Assessing the Impact of Remittances, Foreign Direct Investment and Sovereign Debt on the Nigerian Economy

This research assessed the impact of Remittances, Foreign Direct Investment and Sovereign Debt on the Nigerian Economy for the period 1981-2023. The specific objectives of the study were to determine the effect of worker remittances, personal remittances, FDI and sovereign debt on Nigeria’s real gross domestic product. The study was anchored on the new economics of migration theory and the neoclassical growth model which emphasized the vital role of capital accumulation in output growth. Data on worker remittance and personal remittance were sourced from World Development Indicator while FDI, sovereign debt and real GDP were sourced from the CBN. Error Correction model was the main data analysis technique. The results indicated that workers remittances had a significant positive impact on Nigeria’s Real GDP, personal remittances had a decreasing effect on economic growth, foreign direct investment exerted a positive and statistically significant effect on the economy while sovereign debt was found to have a significantly negative effect on the economy. The study concluded that worker remittances and FDI emerged as the major contributors to GDP growth, underscoring the importance of Nigerians in diaspora in supporting the domestic economy. The study recommended intensification of the technical exchange programme which ensures compensation of short-period workers to earn more personal remittances, effective debt management and offering incentives that will spur investment of foreign capital in critical sectors of the Nigerian economy in order to enhance overall economic growth.