IDEAS home Printed from https://ideas.repec.org/a/sae/prodev/v15y2015i4p343-357.html
   My bibliography  Save this article

Dynamics of remittance utilization by Nigerian households

Author

Listed:
  • William M. Fonta

    (West African Science Service Centre on Climate Change and Adapted Land Use (WASCAL), Ouagadougou, Burkina Faso Center for Demographic and Allied Research (CDAR), Department of Economics, University of Nigeria, Enugu State, Nigeria)

  • Elias T. Ayuk

    (United Nations University Institute for Natural Resources in Africa (UNU-INRA), University of Ghana, Accra, Ghana)

  • Jude O. Chukwu

    (Center for Demographic and Allied Research (CDAR), Department of Economics, University of Nigeria, Enugu State, Nigeria)

  • Onyukwu E. Onyukwu

    (Institute for Development Studies, University of Nigeria, Enugu Campus, Nigeria)

  • Cletus C. Agu

    (Center for Demographic and Allied Research (CDAR), Department of Economics, University of Nigeria, Enugu State, Nigeria)

  • Innocent O. Umenwa

    (Center for Demographic and Allied Research (CDAR), Department of Economics, University of Nigeria, Enugu State, Nigeria)

Abstract

Nigeria is currently ranked as the world’s top 10 remittance destination country with estimated official inflows of about US$10 billion. However, very little is still known about the end-use dynamics of these large inflows into Nigeria. Understanding these dynamics is central to any attempt to minimize the negative effects of migration, while optimizing its development potentials in the country. Using a new dataset involving 697 end-users of remittances collected at money-operating facilities in the country between March 2011 and December 2012, the study finds that the bulk of remittances flowing into Nigeria are primarily used to subsidize households’ consumption, education and health expenditures (74.3 per cent). However, intriguingly, when sources are disaggregated, the study finds that remittances originating from within Africa are driven by ‘pure altruism’, whereas those originating from the rest of the world are mostly driven by ‘purely selfish’ motives.

Suggested Citation

  • William M. Fonta & Elias T. Ayuk & Jude O. Chukwu & Onyukwu E. Onyukwu & Cletus C. Agu & Innocent O. Umenwa, 2015. "Dynamics of remittance utilization by Nigerian households," Progress in Development Studies, , vol. 15(4), pages 343-357, October.
    • Handle: RePEc:sae:prodev:v:15:y:2015:i:4:p:343-357
    DOI: 10.1177/1464993415592742
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/1464993415592742
    Download Restriction: no
    File URL: https://libkey.io/10.1177/1464993415592742?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Adams Jr., Richard H. & Cuecuecha, Alfredo, 2010. "Remittances, Household Expenditure and Investment in Guatemala," World Development, Elsevier, vol. 38(11), pages 1626-1641, November.
    2. Lã“Pez-Feldman, Alejandro & Mora, Jorge & Taylor, J. Edward, 2007. "Does natural resource extraction mitigate poverty and inequality? Evidence from rural Mexico and a Lacandona Rainforest Community," Environment and Development Economics, Cambridge University Press, vol. 12(2), pages 251-269, April.
    3. Woodruff, Christopher & Zenteno, Rene, 2007. "Migration networks and microenterprises in Mexico," Journal of Development Economics, Elsevier, vol. 82(2), pages 509-528, March.
    4. Mazhar Y. Mughal, 2013. "Remittances As Development Strategy: Stepping Stones Or Slippery Slope?," Journal of International Development, John Wiley & Sons, Ltd., vol. 25(4), pages 583-595, May.
    5. Amar Iqbal Anwar & Mazhar Mughal, 2012. "Remittances, inequality and poverty in Pakistan: macro and microeconomic Evidence [Centre d'Analyse Théorique et de Traitement des données économiques REMITTANCES, INEQUALITY AND POVERTY IN PAKISTA," Working papers of CATT hal-01885153, HAL.
    6. Taylor, J. Edward & Mora, Jorge & Adams, Richard H., Jr. & Lopez-Feldman, Alejandro, 2005. "Remittances, Inequality and Poverty: Evidence from Rural Mexico," Working Papers 60287, University of California, Davis, Department of Agricultural and Resource Economics.
    7. Siddiqui, Tasneem. & Abrar, Chowdhury R., 2003. "Migrant worker remittances and microfinance in Bangladesh," ILO Working Papers 993632983402676, International Labour Organization.
    8. Adams, Richard H. Jr., 2004. "Remittances and poverty in Guatemala," Policy Research Working Paper Series 3418, The World Bank.
    9. John Chiwuzulum Odozi & Timothy Taiwo Awoyemi & Bolarin Titus Omonona, 2010. "Household poverty and inequality: the implication of migrants’ remittances in Nigeria," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(2), pages 191-199.
    10. Poirine, Bernard, 1997. "A theory of remittances as an implicit family loan arrangement," World Development, Elsevier, vol. 25(4), pages 589-611, January.
    11. Ahmed, Vaqar & Sugiyarto, Guntur & Jha, Shikha, 2010. "Remittances and Household Welfare: A Case Study of Pakistan," ADB Economics Working Paper Series 194, Asian Development Bank.
    12. Stark, Oded & Bloom, David E, 1985. "The New Economics of Labor Migration," American Economic Review, American Economic Association, vol. 75(2), pages 173-178, May.
    13. Abubakar Lawan Ngoma & Normaz Wana Ismail, 2013. "The Impact of Brain Drain on Human Capital in Developing Countries," South African Journal of Economics, Economic Society of South Africa, vol. 81(2), pages 211-224, June.
    14. Acosta, Pablo & Fajnzylber, Pablo & Lopez, J. Humberto, 2007. "The impact of remittances on poverty and human capital : evidence from Latin American household surveys," Policy Research Working Paper Series 4247, The World Bank.
    15. Munim K. Barai, 2012. "Development Dynamics of Remittances in Bangladesh," SAGE Open, , vol. 2(1), pages 21582440124, January.
    16. Lucas, Robert E B & Stark, Oded, 1985. "Motivations to Remit: Evidence from Botswana," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 901-918, October.
    17. John Chiwuzulum Odozi & Timothy Taiwo Awoyemi & Bolarin Titus Omonona, 2010. "Household poverty and inequality: the implication of migrants' remittances in Nigeria," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 13(2), pages 191-199.
    18. repec:ilo:ilowps:363298 is not listed on IDEAS
    19. World Bank, 2011. "Migration and Remittances Factbook 2011 : Second Edition," World Bank Publications - Books, The World Bank Group, number 2522, December.
    20. Taylor, J. Edward & Mora, Jorge, 2006. "Does migration reshape expenditures in rural households? Evidence from Mexico," Policy Research Working Paper Series 3842, The World Bank.
    21. Acosta, Pablo & Calderon, Cesar & Fajnzylber, Pablo & Lopez, Humberto, 2008. "What is the Impact of International Remittances on Poverty and Inequality in Latin America?," World Development, Elsevier, vol. 36(1), pages 89-114, January.
    22. Oded Stark, 1991. "The Migration of Labor," Blackwell Books, Wiley Blackwell, number 1557860300, June.
    23. Cynthia Bansak & Brian Chezum, 2009. "How Do Remittances Affect Human Capital Formation of School-Age Boys and Girls?," American Economic Review, American Economic Association, vol. 99(2), pages 145-148, May.
    24. Raúl Hernández-Coss & Chinyere Egwuagu Bun, 2007. "The UK-Nigeria Remittance Corridor : Challenges of Embracing Formal Transfer Systems in a Dual Financial Environment," World Bank Publications - Books, The World Bank Group, number 6654, December.
    25. Lipton, Michael, 1980. "Migration from rural areas of poor countries: The impact on rural productivity and income distribution," World Development, Elsevier, vol. 8(1), pages 1-24, January.
    26. Nwosu O. Emmanuel & Fonta M. William & Aneke Gladys & Yuni N. Denis, 2012. "Microeconomic determinants of migrant remittances to Nigerian households," Economics Bulletin, AccessEcon, vol. 32(4), pages 3425-3438.
    27. Adams, Richard H., Jr. & Cuecuecha, Alfredo & Page, John, 2008. "The impact of remittances on poverty and inequality in Ghana," Policy Research Working Paper Series 4732, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bang, James T. & Mitra, Aniruddha & Wunnava, Phanindra V., 2018. "Hollowing Out the Middle? Remittances and Income Inequality in Nigeria," IZA Discussion Papers 11438, Institute of Labor Economics (IZA).
    2. Iddisah Sulemana & Louis Doabil & Ebenezer Bugri Anarfo, 2019. "International Remittances and Subjective Wellbeing in Sub-Saharan Africa: A Micro-level Study," Journal of Family and Economic Issues, Springer, vol. 40(3), pages 524-539, September.
    3. Chinedu Obi & Fabio Bartolini & Marijke D’Haese, 2020. "International migration, remittance and food security during food crises: the case study of Nigeria," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(1), pages 207-220, February.
    4. Nerys Fuller-Love & Mofoluke Akiode, 2020. "Transnational Entrepreneurs Dynamics in Entrepreneurial Ecosystems: A Critical Review," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 6(1), pages 41-66, January.
    5. Ibrahim Ayoade Adekunle & Tolulope Oyakhilome Williams & Olatunde Julius Omokanmi & Serifat Olukorede Onayemi, 2020. "The Mediating Role Of Institutions In The Remittance–Growth Relationship: Evidence From Nigeria," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 65(227), pages 7-30, October –.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kashif Imran & Evelyn S. Devadason & Cheong Kee Cheok, 2019. "Developmental Impacts of Remittances on Migrant-Sending Households: Micro-Level Evidence from Punjab, Pakistan," Journal of South Asian Development, , vol. 14(3), pages 338-366, December.
    2. A. Nurul Hossain & Syed Hasanuzzaman, 2013. "Remittances and investment nexus in Bangladesh: an ARDL bounds testing approach," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 60(4), pages 387-407, December.
    3. Bang, James T. & Mitra, Aniruddha & Wunnava, Phanindra V., 2016. "Do remittances improve income inequality? An instrumental variable quantile analysis of the Kenyan case," Economic Modelling, Elsevier, vol. 58(C), pages 394-402.
    4. Dean Yang, 2008. "International Migration, Remittances and Household Investment: Evidence from Philippine Migrants' Exchange Rate Shocks," Economic Journal, Royal Economic Society, vol. 118(528), pages 591-630, April.
    5. Aggarwal, Reena & Demirgüç-Kunt, Asli & Pería, Maria Soledad Martínez, 2011. "Do remittances promote financial development?," Journal of Development Economics, Elsevier, vol. 96(2), pages 255-264, November.
    6. Ambrosius, Christian & Cuecuecha, Alfredo, 2014. "Do remittances increase borrowing?," Discussion Papers 2014/19, Free University Berlin, School of Business & Economics.
    7. Nguyen, Cuong Viet & Nguyen, Hoa Quynh, 2015. "Do internal and international remittances matter to health, education and labor of children and adolescents? The case of Vietnam," Children and Youth Services Review, Elsevier, vol. 58(C), pages 28-34.
    8. Theodore Gerber & Karine Torosyan, 2013. "Remittances in the Republic of Georgia: Correlates, Economic Impact, and Social Capital Formation," Demography, Springer;Population Association of America (PAA), vol. 50(4), pages 1279-1301, August.
    9. Jean-Louis Combes & Christian Hubert Ebeke & Mathilde Maurel & Urbain Thierry Yogo, 2011. "Remittances and the prevalence of working poor," Post-Print halshs-00587797, HAL.
    10. Leonardo Bonilla-Mejía, 2017. "Choques externos y remesas internacionales en las regiones de Colombia," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 35(84), pages 189-202, December.
    11. Chakra P. ACHARYA & Roberto LEON-GONZALEZ, 2013. "The Impact of Remittance on Poverty and Inequality: A Micro-Simulation Study for Nepal," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 3(9), pages 1061-1080, September.
    12. Duval, Laetitia & Wolff, François-Charles, 2015. "Ethnicity and remittances: Evidence from Kosovo," Journal of Comparative Economics, Elsevier, vol. 43(2), pages 334-349.
    13. Joseph B. Ajefu & Joseph O. Ogebe, 2021. "The effects of international remittances on expenditure patterns of the left‐behind households in Sub‐Saharan Africa," Review of Development Economics, Wiley Blackwell, vol. 25(1), pages 405-429, February.
    14. Meyer, Wiebke, 2012. "Motives for remitting from Germany to Kosovo," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 69, number 69.
    15. Nimesh Salike & Jingyi Wang & Paulo Regis, 2022. "Remittance and its Effect on Poverty and Inequality: A Case of Nepal," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 34(2), pages 1-29, October.
    16. Mora-Rivera, Jorge & van Gameren, Edwin, 2021. "The impact of remittances on food insecurity: Evidence from Mexico," World Development, Elsevier, vol. 140(C).
    17. Anghel, Remus Gabriel & Piracha, Matloob & Randazzo, Teresa, 2015. "Migrants' Remittances: Channelling Globalization," IZA Discussion Papers 9516, Institute of Labor Economics (IZA).
    18. Garcia, Pablo M & Rodriguez-Montemayor, Eduardo, 2010. "A primer of international migration: The Latin American experience and a proposal for a research agenda," MPRA Paper 24147, University Library of Munich, Germany.
    19. Eralba CELA, 2014. "Motivations behind the size of remittances. Evidence from Albanians in Italy," Working Papers 406, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    20. Grabrucker, Katharina, 2021. "Effects of internal rural-urban migration on rural non-farm enterprises: Evidence from Thailand and Vietnam," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-85-21, University of Passau, Faculty of Business and Economics.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:prodev:v:15:y:2015:i:4:p:343-357. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.