Migrant Remittances and Financial Sector Development: New Evidence from Nigeria

This paper analyzes the impact of remittances on financial sector development in Nigeria using data for more than four decades (1980‐2022). The study applies the error correction mechanism because of its ease of implementation, power and robustness as well as its role in explaining stationarity among economic variables. The empirical analysis shows that remittances promote financial sector development during the period with evidence that policies and programmes to improve the financial sector in the previous period impact significantly on the financial sector. The result also shows that increases in export and gross national product per capita promotes financial sector development in a positive and significant manner while high inflationary trend is detrimental to financial sector development.