INFLUENCE OF INTERNATIONAL REMITTANCES ON NIGERIA'S ECONOMIC PROGRESS AND DEVELOPMENT DYNAMICS

Nigeria’s trajectory of economic development over the past two decades reveals that although foreign remittance inflows have consistently grown, the country’s overall economic progress has either remained stagnant or experienced notable decline. This research set out to evaluate the impact of international remittances on Nigeria's economic advancement. A variety of econometric methods including descriptive analysis and unit root testing were employed. Given the characteristics and behavior of the variables involved, the Autoregressive Distributed Lag (ARDL) model was adopted for the analysis. The results indicate that remittances from abroad make a meaningful contribution to Nigeria's long-term economic development. However, their influence on short-term human development outcomes is less consistent, often hindered by inflationary effects and suboptimal resource allocation. The study also found that the quality of institutions plays a crucial role in amplifying the growth-enhancing effects of remittances, underlining the importance of effective governance and robust regulatory systems. In the early stages, fluctuations in the exchange rate tend to exert a negative influence on economic growth. Nonetheless, when remittances are adjusted for currency volatility, their contribution becomes more favorable over time stressing the need for exchange rate stability. While development within the financial sector shows a positive link to remittance effectiveness, the relationship lacks statistical significance, suggesting that Nigeria’s issues with financial inclusion may be limiting the broader benefits. Based on these findings, the study recommends that the Nigerian government undertake comprehensive institutional reforms aimed at improving governance, curbing corruption, and enhancing regulatory frameworks. Strengthening institutional structures will help ensure that remittance inflows are channeled into productive investments and are not undermined by inefficiencies in the system.