MONETARY POLICY TRANSMISSION MECHANISMS, REMITTANCES INFLOWS AND ECONOMIC PERFORMANCE: EMPIRICAL ANALYSIS FROM NIGERIA

Abstract

Migrant remittance inflows have witnessed unprecedented surge over time in Nigeria in recent times. These remittances are commonly influenced through the monetary policy of the government towards driving economic' activities and performance in a county. Yet. link is known 011 the empirical front on the nevus between monetary• policy transmission mechanisms. diaspora remittances and economic performance. It is against this backdrop, this study is undertaken. The research used time-series data from 1960 to 2018 was sourced from the World Bank Indicators and Central Bank of Nigeria Statistical Bulletin. The study employed econometric techniques such as the Augmented Dickey-Fuller (ADP) unit root lest. correlation statistics. Granger causality test and the general method of moment (GMM) to analyze the data. The study finding showed that remittances inflows are a major driver of economic activities and growth in the Nigeria clime. Exchange rate exerted a positive impact on gross domestic product per capita growth in Nigeria. Both remittances inflows and exchange rate maintained a hi-directional causality with the performance of the economy of Nigeria. The studs' concludes that remittances inflows have a correlation with monetary policy transmission mechanisms towards enhancing the performance of the economy of Nigeria. It is therefore recommended that the government needs to create investors' friendly environment capable of encouraging migrants to channel their resources into the economy. This will help to boost economic activities. reduce the unemployment rale. increases savings. with the end goal of engendering economic performance of Nigeria. This study, therefore. suggests that the Central Bank of Nigeria CBN) should urgently come up with a policy framework that can increase the mutiny's capital stock instead of expending it as this has the capacity. f. influencing economic activities in the economy.