An Empirical Investigation of Remittance Shocks on ‎Economic Growth in ‎‎Nigeria: Effect COVID-19 on Economic Growth for ‎‎2019-2020 Years

Abstract

Aims: The study investigates the impact of remittances shocks on economic growth in Nigeria in the midst of Covid-19. Study Design: This study is design to investigate the shocks effect of remittances on the economic growth in Nigeria in the midst of Covid-19. The analysis is based on monthly data, the period which study intends to cover is 24 months i.e. (2019 m1-2020 m12). Quantitative technique of data analysis is employed due to the nature of the study. The analysis is based on time series econometric modeling that establishes link between the variables of interest and controls for other variables affecting the relationship. Place and Duration of the Study: Nigerian Economy in the midst of Covid-19 from 2019m1 to 2020m12. Methodology: The study employed Structural Vector Autoregressive (SVAR) model. Results: The results revealed that, the shock of remittances on real gross domestic product was found to be positive. Exchange rate has negative effect on real gross domestic product in Nigeria. Foreign direct investment has negative effect on real gross domestic product in Nigeria. The result from impulse response function shows that, the shock of remittances to real GDP in the midst of to Covid-19 pandemic has impacted positively. The Granger causality test shows that remittances granger cause real gross domestic product and real gross product granger cause remittances in Nigeria. Exchange rate granger cause real gross domestic product and real gross product granger cause exchange rate in Nigeria. Foreign direct investment granger cause real gross domestic product and real gross product granger cause foreign direct investment in Nigeria. Conclusions: According to the report, the Nigerian government should give measures to make remittances cheaper because bigger remittance inflows will compensate for any losses incurred as a result of the COVID-19 epidemic, and remittances should be used for both investment and consumption.