Abstract

The study examined the diaspora remittance on balance of payment in Nigeria. The specifically, the study sought to: determine the impact of remittance on balance of payment in Nigeria and determine direction of causality relationship between remittance and balance of payment in Nigeria. This study adopted ex post-facto research design. These variables consist of value of balance of payment (BOP), diaspora remittance (REM), trade openness (TRADE) and exchange rate (EXCH) for the period of 1990 to 2024. The method of data analysis were descriptive statistics, Correlation Matrix of the Variables, Augmented Dickey-Fuller Unit Root test statistic, Johansen Co-integration test. The estimation technique includes Dynamic Ordinary least square (DOLS) while post-estimation techniques involves Histogram Normality Test. The empirical result showed that diaspora remittance has positive and significant impact on balance of payment (t-statistics; 7.7346; P-value; 0.0000 < Sig-value: 0.005). The result of pairwise granger causality test showed that there is bilateral causality relationship between diaspora remittance and balance of payment in Nigeria (F-statistics; 6.2126; P-value; 0.5611 > Sig-value: 0.0008). The study recommended that Nigeria government should implement policies encouraging the prudent use of funds received through remittances, directing them into productive investments. This strategy can stimulate increased inflow of remittances into the country.