FINANCIAL DEVELOPMENT IN NIGERIA: THE ROLE OF REMITTANCES
Mustapha Ayobanji Rafiu1, Bakare-Aremu Babatunde2 and Sheu Mustapha
Given the increasing inflow of remittances to Nigeria, it is imperative to assess whether they have impact on financial development in Nigeria or not. So, the study examined the impact of remittances on financial development in Nigeria. The study used two indicators as proxies for financial development which include: money supply and market capitalization. The study used secondary data which were sourced from the Central Bank of Nigeria Statistical Bulletin and World Bank’s World Development Indicators. Owing to the fact that the data used are stationary at different orders and are co-integrated, the study employed Auto-Regressive Distributed Lag Model (ARDL) to investigate the impact of remittances on financial development. The results from the regression indicate generally that remittances have impact on financial development. It was found in the result that remittances have positive impact on money supply in Nigeria. It however, exerts no-impact on market capitalization in Nigeria.