IMPACT OF FOREIGN REMITTANCE AND EXPORTS ON ECONOMIC GROWTH IN NIGERIA

This study investigates the impact of foreign remittances and exports on economic growth in Nigeria over the period 1981–2023. Using time series data sourced from the Central Bank of Nigeria (CBN), the World Bank’s World Development Indicators (WDI), and the National Bureau of Statistics (NBS), the research employs descriptive statistics, the Augmented Dickey-Fuller (ADF) unit root test, the Johansen cointegration technique, and the Vector Error Correction Model (VECM) to examine both short-run dynamics and long-run relationships among the variables. The findings reveal that exports exert a positive and statistically significant influence on economic growth, thereby supporting the export-led growth hypothesis in the Nigerian context. In contrast, foreign remittances exhibit a positive but statistically insignificant short-run impact on GDP growth, suggesting that remittances are predominantly channeled toward consumption rather than productive investment in the short term. However, the cointegration results confirm a stable long-run equilibrium relationship among economic growth, remittances, exports, exchange rate, and other macroeconomic variables. Diagnostic tests (Durbin–Watson, Variance Inflation Factor (VIF), normality, and stationarity tests) affirm the reliability and robustness of the model. The study concludes that while exports remain the stronger driver of growth, remittances play a complementary role through foreign exchange augmentation and long-term capital formation. Policy recommendations include the aggressive promotion and diversification of non-oil exports, improvement of formal remittance channels, exchange rate stability, and the creation of incentives to direct diaspora funds into productive sectors. These measures are essential for harnessing the full growth potential of remittances and exports in Nigeria.