REMITTANCE DRIVEN FINANCIAL FLOWS, SOCIAL ENVIRONMENTAL CHANGES, AND INCLUSIVE GROWTH IN NIGERIA: EVIDENCE FROM PARTIAL LEAST SQUARES STRUCTURAL EQUATION MODELING

Guided by the New Economics of Labour Migration Theory, this study examined the influence of remittance driven financial flows on inclusive growth in Nigeria, focusing on the mediating role of social environmental changes and the effect of institutional factors. Although Nigeria is one of Africa's largest recipients of remittances, evidence on their contribution to inclusive growth remains inconclusive. Annual secondary data spanning 2000 to 2024 were obtained from the World Bank, Worldwide Governance Indicators, Central Bank of Nigeria, National Bureau of Statistics, International Monetary Fund, and United Nations Development Programme. The data were analysed using Partial Least Squares Structural Equation Modeling (PLS SEM) in SmartPLS 4. The findings revealed that remittance driven financial flows had a positive but insignificant direct effect on inclusive growth (β = 0.218, p = 0.374). However, remittances significantly improved social environmental changes (β = 0.683, p Page | 14< 0.001), which, in turn, positively influenced inclusive growth (β = 0.677, p < 0.001). Social environmental changes fully mediated the relationship between remittance inflows and inclusive growth (β = 0.463, p < 0.001), while the model explained 78.6% of the variation in inclusive growth. The study concludes that remittances promote inclusive growth primarily through improvements in social environmental conditions and recommends policies that encourage productive remittance investment, strengthen human capital development, and expand financial inclusion.