Kehinde Oluseyi Olagunju Szent Istvan University, Godollo, Hungary. “African Globalities – Global Africans” 4 th Pecs African Studies Conference, University of Pecs, Hungary. 10 th June, 2016 Do Remittance Inflow Improve Household Welfare in Sub- Sahara Africa? Evidence from Nigeria.

Outline  Introduction  Motivation and aims of study  Methodology –  Study area  Sampling techniques  Analytical technique  Results and Discussion –  Conclusion and Recommendation.

Introduction  Migration affects National economic growth and development process.  About 230 million people are living outside their countries of birth in 2013 while over 700 million migrate within their countries.  Migration can be push or pull factors.  Economic, demographic forces, globalization and climate change are important drivers of migration.  A close relationship between household welfare and migration has been established  Remittances to developing countries are estimated to reach $414 billion in % increase over the previous year

Motivation of the Study  Remittance inflows into Nigeria estimate is US$10billion in  Nigeria as the world’s top 10 remittances destination country in 2010  Migrants’ remittances into Nigeria exceed Foreign Direct Investments and Overseas Development Assistance.  More than 30% of the total households receive remittance.  There is progressively worsening welfare conditions of Nigerians.  Lack of essential welfare exists in both urban and rural areas.  Despite the ever increasing size of remittances, there has been little effort to analyze its effect on economic development especially on welfare.  Lack of understanding of the impact of remittance in Nigeria’s economic and national development, makes remittances to be poorly managed

 Nigeria does not put remittance of migrant workers to their best use.  Remittances increase the dependency behavior among the receiving households.  Receiving households do not have interest in doing work.  The long run negatively affect the households’ welfare.  Migration of the people also creates some social problems -  Such as fatherless children and broken families.  No clear picture of the impact of remittance on households welfare.  Therefore, quantifying and investigation its impact is key Motivation of the Study (Cont’d)

Methodology  Study Area – Nigeria  Source of Data World Bank {Remittance and Migration Unit} Household Surveys for the African Migration Project in Nigeria.  Data employed for the study are -  socioeconomic characteristics, household remittance income, consumption/expenditure on both food and non-food, asset possession  Analytical methods used –  Descriptive statistics – to profile household socioeconomics  Multiple regression – to examine determinants of welfare  Propensity Score Matching {PSM} – to examine the impact of remittance on welfare.

OUR FINDINGS

Socioeconomic Characteristics of Respondents Household characteristics Remittance receiving households N=253 Non-remittance receiving households N=299 t-value Age * Household size{numbers} * Employment status [Employed] Education status [formal education] Per capita household expenditure {Naira} ₦ ₦ **

Factors Influencing Households Welfare in Nigeria VariablesCoefficientt-value Household head Education No formal education primary education secondary education tertiary education0.276**2.39 Remittance (Yes)0.331***2.18  It is established here that remittance influence the welfare of receiving households.  But to what extent?

Econometric Analysis of Impact of remittance on Household welfare {Pooled}  Remittances positively impact household welfare by ₦ k.  On the overall population, the effect of remittances is somewhat smaller with a value ₦ k compared to the treated category VariableSampleTreatedControlDifference t-stat PCE{welfare}Unmatched ATT ATU ATE

Econometric Analysis of Impact of remittance on Rural Household welfare  Remittances positively impact rural household welfare by ₦ k.  On the overall rural population, the effect of remittances is somewhat smaller with a value ₦ k compared to the treated category VariableSampleTreatedControl Difference (t-stat) PCE{welfare}Unmatched ATT ATU ATE

Econometric Analysis of Impact of remittance on Urban Household welfare {Pooled}  Remittances positively impact household welfare by ₦ k.  On the overall population, the effect of remittances is somewhat smaller with a value ₦ k compared to the treated category VariableSampleTreatedControl Difference t-stat PCE{welfare}Unmatched ATT ATU ATE

Conclusion  The impact of remittances on household welfare in Nigeria is confirmed.  Remittance had a positive impact on household welfare in all situations considered  The estimate of urban and rural households revealed that remittances increased household welfare by 52.5% and 38.7% in urban and rural areas respectively.  The treatment estimates revealed that remittances had higher impact in urban households than the rural households.

Recommendations  Policies should be made to reduce the costs of transferring funds to Nigeria.  Also, rebates [in handling charges or higher conversion rates] should be considered for rural households  A national policy on remittances could help place the issue of remittances on the national and regional development agenda.  Infrastructure supporting remittances especially in rural Nigeria, technological improvements in the banking sector could also significantly reduce transaction costs.  Nigeria is to motivate senders and recipients of remittances to conduct their money transfer operations through formal financial institutions.

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