An Empirical Analysis of Financial Inflows and Per Capita Income in Nigeria

Peter-Israel; L. I.; Nwadighoha; C.E.; Okafor; M.C.; Alpheaus; O.E

doi:10.56201/ijssmr.vol.12no10.2026.pg703.716

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An Empirical Analysis of Financial Inflows and Per Capita Income in Nigeria

Peter-Israel, L. I., Nwadighoha, C.E., Okafor, M.C., Alpheaus, O.E

Abstract

This study examined the effect of financial inflows on per capita income in Nigeria over the period 1980–2025. Specifically, it investigated the effects of tax revenue and foreign remittances on per capita income. The study adopted an ex post facto research design and utilised annual secondary time-series data covering 46 observations. Data were obtained from relevant publications of the Central Bank of Nigeria and the World Bank’s World Development Indicators. Descriptive statistics, correlation analysis and the Augmented Dickey–Fuller unit root test were employed for preliminary analysis, while the ordinary least squares regression technique was used for estimation. The Breusch–Pagan–Godfrey test was conducted to examine heteroskedasticity. The results revealed that tax revenue had a positive but statistically insignificant effect on per capita income, with a coefficient of 0.046296 and a probability value of 0.6274. Similarly, foreign remittances had a positive but statistically insignificant effect, with a coefficient of 0.114003 and a probability value of 0.1758. The coefficient of determination indicated that the explanatory variables jointly explained approximately 69.59% of the variation in per capita income, while the overall regression model was statistically significant. The study concludes that, although tax revenue and foreign remittances were positively associated with per capita income, their individual effects were not statistically significant during the period examined. It recommends strengthening tax administration, improving the productive allocation of public revenue, promoting affordable formal remittance channels and encouraging productive investment of remittance funds to support sustainable improvements in income.

Keywords

Financial inflowstax revenueforeign remittancesper capita incomeNigeria.

References

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An Empirical Analysis of Financial Inflows and Per Capita Income in Nigeria

Abstract

Keywords

References

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