THE IMPACT OF MIGRANT REMITTANCES ON POVERTY REDUCTION IN NIGERIA

ABSTRACT This study examined the impact of migrant remittances on poverty reduction in Nigeria using annual time series data spanning 1992 to 2024 obtained from the World Bank Development Indicators, Central Bank of Nigeria (CBN) Statistical Bulletin, and the National Bureau of Statistics (NBS). The Auto-Regressive Distributed Lag (ARDL) model was employed to investigate both short-run and long-run relationships among the variables. The dependent variable was poverty rate, while the independent variables included remittances, real GDP per capita, population growth, unemployment, and inflation. The results of the unit root tests indicated that the series were integrated at levels I(0) and first difference I(1), which justified the use of the ARDL approach. The long-run estimation revealed that migrant remittances had a positive and significant effect on poverty reduction, suggesting that funds from abroad contribute meaningfully to household welfare in Nigeria. However, economic growth measured by GDP per capita exhibited a paradoxical positive effect on poverty, implying that growth in Nigeria has not been inclusive enough to translate into welfare gains for the poor. Inflation was also found to be negatively significant, indicating structural distortions where rising prices may not directly exacerbate poverty in the short run. The error correction term was negative and significant, confirming a moderate speed of adjustment of 14.7% annually towards long-run equilibrium. Diagnostic and stability tests validated the robustness of the model. The study recommends that policy measures should focus on deepening financial inclusion, reducing unemployment, ensuring macroeconomic stability, and making growth more inclusive so that the benefits of remittances and economic expansion can translate into sustainable poverty alleviation in Nigeria.