EFFECT OF REMITTANCE INFLOWS ON ECONOMIC DEVELOPMENT IN NIGERIA

Economic development continues to be a key policy goal in developing countries like Nigeria as it can be interpreted as an advancement in production, income generation, employment creation and living standard. Remittances over the last few years have become a significant source of foreign financing which can be used to stimulate economic activities, decrease poverty and complement domestic investment. Yet despite this increase in remittance inflows to Nigeria, there is still apprehension about the impact remittances have on sustainable economic development between the exchange rate volatility and inflationary pressures in the country. This study thus investigated the relationship between Official remittance and workers’ remittances with the economic development of Nigeria between 2000 and 2024. The study specifically examined the impact of official remittances, workers' remittances, exchange rate and inflation rate on Gross Domestic Product (GDP) as an indicator of economic development. The study design was of an ex post facto type and the data used were secondary time series data retrieved from the databases of the Central Bank of Nigeria Statistical Bulletin, World Bank World Development Indicators, and International Monetary Fund. Data analysis was done using descriptive statistics, correlation analysis, Augmented Dickey-Fuller unit root tests and Autoregressive Distributed Lag (ARDL) model. The results showed that the official remittances are positively and statistically significant for short and long period economic development, workers' remittances are also positive and statistically significant for short and long period economic development, and exchange rate volatility and inflation have negative and statistically significant impact on GDP in short and long period. The study found that remittances play an important role in economic development in the presence of a stable macro-economic environment. It thus suggested the strengthening of formal remittance channels, the productive use of remittances, the stability of exchange rates and the effective implementation of inflation-control policies to improve sustainable economic growth.