The Effects of Diaspora Remittances and Investment on Sustainable Development in Nigeria

Despite the growing importance of diaspora remittances and investment in financing development, Nigeria still faces challenges in translating these inflows into sustainable development. This raises concerns about whether remittances and investment contribute to sustainable development beyond their short-run effects. This study examined the effects of diaspora remittances and investment on sustainable development in Nigeria over the period 1990–2025. Adjusted Net Savings (ANS) was used as a proxy for sustainable development, while gross capital formation (GCF) represented investment. Annual data obtained from the Central Bank of Nigeria (CBN), the National Bureau of Statistics (NBS), and the World Bank’s World Development Indicators (WDI) were analysed using the Autoregressive Distributed Lag (ARDL) approach. The bounds test yielded an F-statistic of 5.71, exceeding the 5 per cent upper-bound critical value of 4.85 and confirming a significant long-run relationship among the variables. The short-run results showed that remittances had a positive and statistically significant lagged effect on ANS, with a coefficient of 2.247 (p = 0.019), although their contemporaneous effect was negative and statistically insignificant. Gross capital formation had a negative and statistically insignificant short-run effect. The error-correction coefficient was negative and statistically significant at the 1 per cent level (−0.535; p = 0.001), indicating that approximately 53.5 per cent of short-run disequilibrium was corrected within one period. In the long run, remittances (−2.413; p = 0.223) and GCF (−0.127; p = 0.756) had negative but statistically insignificant effects on ANS. The study concluded that remittances had short-run developmental potential, but neither remittances nor investment significantly improved sustainable development in the long run. It recommended strengthening financial inclusion, promoting productive remittance investment, improving investment efficiency, enhancing institutional capacity, and adopting an integrated remittance–investment policy framework to promote sustainable wealth creation and environmentally sustainable capital formation in Nigeria.

Keywords

Adjusted Net Savings; Diaspora Remittances; Gross Capital Formation

Downloads

PDF JATS XML

References

1. Abdulkareem, H. K. K., Jimoh, S. O., Nofiu, T. T., & Akande, R. S. (2025). Leaving no one behind: Examining the effect of financial, gender, and digital inclusion on sustainable development. Sustainable Development, 33(2), 2519–2534. [Google Scholar] [Crossref]

2. Adeleye, B. N., & Eboagu, C. (2024). Remittances and development outcomes in emerging economies. Review of Development Economics, 28(3), 1098–1118. [Google Scholar] [Crossref]

3. Adewale, B. J., Ameji, N.E. & Solomon, U.P.(2021). Diaspora remittances and the growth of the Nigerian economy. Aydın Adnan Menderes University Journal of Institute of Social Sciences, 8(2), 170-185. [Google Scholar] [Crossref]

4. Adewuyi, A. O., & Olofin, S. O. (2024). Macroeconomic instability and living standards in Nigeria. Economic Change and Restructuring, 57(4), 2411–2432. [Google Scholar] [Crossref]

5. Ahmat-Tidjani, M. I. (2025). Financial inclusion, remittances and household consumption in Sub Saharan Africa: Evidence from the application of an endogenous threshold dynamic panel model. Economics and Business Review, 11(2), 67–90. [Google Scholar] [Crossref]

6. Ajide, K. B., & Raheem, I. D. (2024). Institutions, remittances and sustainable growth in Africa. Economic Change and Restructuring, 57(2), 1091–1113. [Google Scholar] [Crossref]

7. Akanle, O., Kayode, D. & Abolade, I. (2022) Sustainable development goals (SDGs) and remittances in Africa, Cogent Social Sciences, 8(1),1-16. [Google Scholar] [Crossref]

8. Alhassan, U., Maswana, J.-C., & Inaba, K. (2024). International remittances and labor supply in Nigeria: Do educational attainment and household income matter? African Development Review, 36(3), 471–485. https://doi.org/10.1111/1467-8268.12769 [Google Scholar] [Crossref]

9. Ali, M., Ahmed, Z., Khan, S., & Li, Y. (2024). Role of remittances on sustainable economic development in developing and emerging economies: New insights from the cross- sectionalaugmented autoregressive distributed lag approach. Journal of Risk and Financial Management, 17(4), Article 153. https://doi.org/10.3390/jrfm17040153 [Google Scholar] [Crossref]

10. Al-kazraji, I. (2026). Remittances and their impact on achieving sustainable economic growth in Sub-Saharan African Countries. AL-Anbar University journal of Economic and Administration Sciences, 18(1), 205-219. [Google Scholar] [Crossref]

11. Amoah, J. O., Alagidede, I. P., & Sare, Y. A. (2024). Industrialization and carbon emission nexus in Sub-Saharan Africa: The moderating role of trade openness. Cogent Economics & Finance, 12(1), Article 2360803. https://doi.org/10.1080/23322039.2024.2360803 [Google Scholar] [Crossref]

12. Anetor, F. O. (2019). Remittance and economic growth nexus in Nigeria: Does financial sector development play a critical role? International Journal of Management, Economics and Social Sciences, 8(2), 116-135. [Google Scholar] [Crossref]

13. Anwar, A. (2024). Remittances and inequality: A meta-analytic investigation. The World Economy, 47(6), 2664–2705. https://doi.org/10.1111/twec.13558 [Google Scholar] [Crossref]

14. Asongu, S. A., & Odhiambo, N. M. (2024). Financial inclusion, governance quality and the development effects of migrant remittances in Africa. International Journal of Finance & Economics, 29(3), 4301–4319. [Google Scholar] [Crossref]

15. Barkat, K., Mimouni, K., Alsamara, M., & Mrabet, Z. (2024). Achieving the sustainable development goals in developing countries: The role of remittances and the mediating effect of financial inclusion. International Review of Economics & Finance, 95(103460),2- 23. https://doi.org/10.1016/j.iref.2024.103460 [Google Scholar] [Crossref]

16. Blouchoutzi, A., Kiohos, A., Nikas, C., & Stoupos, N. (2026). Remittances, trade balance, and the EU integration challenge: Evidence from the Western Balkans and Eastern Partnership countries. Comparative Economic Studies, 68(2),1–31. https://doi.org/10.1057/s41294- 026-00283-7 [Google Scholar] [Crossref]

17. Boos, A. (2015). Genuine savings as an indicator for “weak” sustainability: Critical survey and possible ways forward in practical measuring. Sustainability, 7(4),4146–4182. https://doi.org/10.3390/su7044146 [Google Scholar] [Crossref]

18. Carare, A., Baratas, A. F., Kilembe, J., Hadzi-Vaskov, M., & Zhang, W. (2024). The joint effect of emigration and remittances on economic growth and labor force participation in Latin America and the Caribbean (IMF Working Paper No. 2024/175). International Monetary Fund. [Google Scholar] [Crossref]

19. Chuong, H. N., Uyen, V. T. P., Ngan, N. D. P., Tram, N. T. B., Han, N. D. M., & Duyen, P. H. K. (2025).The impact of globalization, renewable energy, and labor on sustainable development: A cross-country analysis. PLOS ONE, 20(2),1–21, Article e0315273. https://doi.org/10.1371/journal.pone.0315273 [Google Scholar] [Crossref]

20. De-Jong, E., Princen, S., & Vijge, M. J. (2025). Fulfilling the promise of “Leaving No One Behind”: Exploring institutional pathways to success. Sustainable Development, 33(S1), 77–90. https://doi.org/10.1002/sd.3555 [Google Scholar] [Crossref]

21. Eniekezimene, A. F., Wodu, E., & Anda-Owei, J. P. (2024). Foreign direct investment and economic growth in Nigeria: A revisit. Asian Journal of Probability and Statistics, 26(2), 37–48. https://doi.org/10.9734/ajpas/2024/v26i2590 [Google Scholar] [Crossref]

22. Eze, U., & Ugwuoke, C. C. (2024). Analysis of population growth, carbon emission, and renewable energy nexus in Nigeria. Journal of Economics and Allied Research, 9(3), 112– 125. [Google Scholar] [Crossref]

23. Farabi, A., Zamroni, Handayani, D. O. D., & Setianto, R. H. (2024). Sustainable development in Indonesia: A study of energy consumption, CO₂ emissions, FDI, and gross capital formation. International Journal of Energy Economics and Policy, 14(2), 435–446. https://doi.org/10.32479/ijeep.15424 [Google Scholar] [Crossref]

24. Ferreira, S., & Vincent, J. R. (2005). Genuine savings: Leading indicator of sustainable development? Economic Development and Cultural Change, 53(3), 737–754. https://doi.org/10.1086/426834 [Google Scholar] [Crossref]

25. Garcia-Fuentes, P. A., Kennedy, P. L., & Ash, W. R. (2025). The multiple impact of remittances on poverty in developing countries: Direct effects and through human capital. Journal of Policy Modeling, 47(2), 428–447. [Google Scholar] [Crossref]

26. Hamilton, K., & Clemens, M. (1999). Genuine savings rates in developing countries. The World Bank Economic Review, 13(2), 333–356. https://doi.org/10.1093/wber/13.2.333 [Google Scholar] [Crossref]

27. Hanley, N., Dupuy, L., & McLaughlin, E. (2015). Genuine savings and sustainability. Journal of Economic Surveys, 29(4), 871–894. https://doi.org/10.1111/joes.12120 [Google Scholar] [Crossref]

28. Ibrahim, A.M. (2026). Diaspora Remittance as a Form of Sustainable Finance: Case Studies in Underdeveloped and Developing Countries. Jurnal Ekonomi, Akuntansi, dan Perpajakan, 3(2), 2-8. [Google Scholar] [Crossref]

29. Ibrahim, T. R., Akintunde, T. S., & Adagunodo, M. (2024). Does remittances actually improve the welfare of Nigerian's households? Journal of Economics and Allied Research, 9(2), 302– 316. [Google Scholar] [Crossref]

30. Ifeacho, C. I. (2025). Remittances and financial sector development in Nigeria. International Journal of Advanced Research in Business and Management, 4(2), 64–82. [Google Scholar] [Crossref]

31. Isana, N. O., Ademeso, S. A., & Maiyaki, B. A. (2025). Diaspora remittances and sustainable development in Nigeria: An empirical analysis. Global Scientific Journal, 13(2), 102–120. [Google Scholar] [Crossref]

32. Jallow, M. L., & Jiang, H. (2025). Remittance, domestic savings and poverty alleviation: Evidence from Sub-Saharan Africa. International Journal of Economics and Financial Issues, 15(4), 196–206. https://doi.org/10.32479/ijefi.19216 [Google Scholar] [Crossref]

33. Jijin, P. (2026). Remittances and labour force heterogeneity: Can the disincentive effect vary? International Review of Applied Economics, 40(1), 40–62. [Google Scholar] [Crossref]

34. Joseph, C. (2025). The linkage between foreign capital inflows and domestic saving in Tanzania. Journal of Developing Economies, 10(1), 26–47. https://doi.org/10.20473/jde.v10i1.56297 [Google Scholar] [Crossref]

35. Lamsal, M. R., & Soneja, S. (2025). Effects of remittance on financial savings in Nepal: An exploration through auto-regressive distributed lag approach. A Bi-Annual South Asian Journal of Research & Innovation, 12(1), 94–108. [Google Scholar] [Crossref]

36. Magwedere, M. R., & Marozva, G. (2024). Remittances and domestic investment nexus: Evidence from a PMG-ARDL approach. International Journal of Applied Economics, Finance and Accounting, 18(1), 33–42. [Google Scholar] [Crossref]

37. Mba, A., & Onwunyi, U. M. (2025). Transnational remittances and human capital development: A focus on Nigeria. African Journal of Politics and Administrative Studies, 18(2), 437– 455. [Google Scholar] [Crossref]

38. Mba, P. N., & Chijioke, M. I. (2024). Does remittance inflow and foreign direct investment spur economic development in developing countries? Insights from Nigeria. Theoretical and Practical Research in Economic Fields, 15(1), 127–135. [Google Scholar] [Crossref]

39. Mutai, N. C., Ibeh, L., & Nguyen, M. C. (2024). Sustainable economic development in Kenya: Influence of diaspora remittances, foreign direct investment and imports. African Journal of Economic and Management Studies, 16(4), 620–639. https://doi.org/10.1108/AJEMS- 01-2024-0059 [Google Scholar] [Crossref]

40. Nasrin, N., Haider, M. Z., & Ahsan, M. N. (2024). Effect of remittance on savings, investment, and reserve: A panel data analysis on South Asian countries. Khulna University Studies, 21(2), 266–274. https://doi.org/10.53808/KUS.2024.21.02.1176-ss [Google Scholar] [Crossref]

41. Nguyen, C. P., Doan, N., Chavez-Bedoya, L., & Schinckus, C. (2026). The contribution of international remittance to financial development in developing countries: A further investigation. International Journal of Finance & Economics, 5(7),1–29. [Google Scholar] [Crossref]

42. Nyamongo, E. M., & Misati, R. N. (2024). Remittances, financial development and inclusive growth in Sub-Saharan Africa. Journal of African Business, 25(4), 558–579. [Google Scholar] [Crossref]

43. Ogege, S. & Agbesuyi, O.K. (2025) Diaspora remittances and economic development in Nigeria. African Development Finance Journal, 8(8),1-24. [Google Scholar] [Crossref]

44. Ojeyinka, T. A., & Ibukun, C. O. (2024). Do remittances mitigate poverty? Evidence from selected countries in Africa, Asia and Latin America. Economic Change and Restructuring, 57, Article 93. https://doi.org/10.1007/s10644-024-09666-1 [Google Scholar] [Crossref]

45. Okeke, C. C., & Nwosu, E. O. (2025). Diaspora remittances, private investment and household welfare in Nigeria. Journal of African Business, 26(1), 55–74. [Google Scholar] [Crossref]

46. Olaoye, O. O., Zerihun, M. F., & Tabash, M. I. (2025). Structural transformation and sustainable development in sub-Saharan Africa. African Journal of Economic and Management Studies, 17(3), 383–404. https://doi.org/10.1108/AJEMS-05-2024-0313 [Google Scholar] [Crossref]

47. Onyina, K., Oboro-Offerie, R. A., & Akoto, O. D. A. (2025). Unpacking the multidimensional impact of international remittances on women's empowerment in Africa: A quasi- experimental study. SN Social Sciences, 5, Article 163. [Google Scholar] [Crossref]

48. Osayi, V. I. & Akemieyefa, M. (2023) Diaspora remittance, financial system and sustainable economic development in Nigeria, Journal of Management and Science, 13(3),19-27. [Google Scholar] [Crossref]

49. Owotemu, A. E., Ifechi-Fred, N. & Faleti, A. (2024). Contributions of diaspora remittances to economic growth and development in Nigeria: A Housing finance and infrastructure perspective 2000-2023. Journal of Service Science and Management, 17:321-344. [Google Scholar] [Crossref]

50. Pal, S. (2024). The international capital flows and domestic savings–domestic investment nexus: A comparative evidence between heterogeneous developing regions. South Asian Journal of Macroeconomics and Public Finance, 13(2), 169–212. [Google Scholar] [Crossref]

51. Pezzey, J. C. V. (2024). Adjusted net savings needs further adjusting: Reassessing human and resource factors in sustainability measurement. Journal of Environmental Economics and Management, 127, 1–20. https://doi.org/10.1016/j.jeem.2024.102984 [Google Scholar] [Crossref]

52. Pillarisetti, J. R. (2005). The World Bank's ‘genuine savings’ measure and sustainability. Ecological Economics, 55(4), 599–609. https://doi.org/10.1016/j.ecolecon.2005.01.018 [Google Scholar] [Crossref]

53. Shair, W., Ahmad, F., Salman, A., & Hassan, R. U. (2026). Exploring the role of external and internal remittances in household development. Cogent Economics & Finance, 14(1), Article 2653316. https://doi.org/10.1080/23322039.2026.2653316 [Google Scholar] [Crossref]

54. Wang, L., Pal, S., Mahalik, M. K., & Gozgor, G. (2025). Empowering sustainable development in emerging economies: The role of renewable energy and domestic investment. Energy Economics, 148, 108-631. https://doi.org/10.1016/j.eneco.2025.108631 [Google Scholar] [Crossref]

55. World Bank. (2018). The changing wealth of nations 2018: Building a sustainable future. Washington, DC: World Bank. https://doi.org/10.1596/978-1-4648-1046-6 [Google Scholar] [Crossref]

56. Zakari, A., & Musibau, H. O. (2024). Sustainable economic development in OECD countries: Does energy security matter? Sustainable Development, 32(1), 1337–1353. https://doi.org/10.1002/sd.2668 [Google Scholar] [Crossref]

57. Zakari, A., Le, T., & Nepal, R. (2025). Sectoral FDI and environmental sustainability in Africa: The role of sustainable investment. Empirical Economics, 69, 1821–1850. https://doi.org/10.1007/s00181-025-02813-1 [Google Scholar] [Crossref]

The Effects of Diaspora Remittances and Investment on Sustainable Development in Nigeria

Authors

Article Information

Publication Timeline

Abstract

Keywords

Downloads

References

Metrics

Views & Downloads

Similar Articles