Does Remittance income Spur Food Imports? Evidence from a Developing Country
Does Remittance income Spur Food Imports? Evidence from a Developing Country

Summary/Abstract: As a source of foreign earning, remittance income has been considered to be a financial resource which could be utilized to pursue economic development goals. This study therefore examines the effectiveness of remittance income on food importation in Nigeria using time-series data for the period 1977 to 2019. The study employed the auto-regressive distributed lag (ARDL)estimation technique to achieve the aim of the study. Results from the analyses indicate that remittance income has a negative impact on food importation both in the short-run and long-run. Wetherefore conclude that remittance inflows do not play a crucial role in increasing food import. Nigeria can benefit from it by investing remittance in productive investment that will have a positive effect on domestic agricultural productivity. Additionally, policy that discourages food importation in favour of domestic agricultural production could be promoted. These include ban or increase in tax of selected food imports where Nigeria has a comparative advantage and a consideration for the devaluation of real effective exchange rate to curtail food importation.

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