Foreign Inflows and Financial Development in Nigeria (Published)
The study ascertained the impact of foreign inflows on financial development in Nigeria from 1986 to 2025. Specifically, the study sought to examine the impact of external debt inflows (EDI), foreign direct investment (FDI), and diaspora remittances (DR) on financial development index (FINDX) in Nigeria. Secondary data extracted from World Bank Development indicators and international monetary fund where analyze using Autoregressive Distributed Lag (ARDL) model. Findings revealed that EDI exert a positive and significant influence on FINDX, in contrast FDI exhibit a negative and significant impact on FINDX; Diaspora remittances was found to have a positive but statistically insignificant effect on FINDX in Nigeria. Based on the findings the study recommends that Policymakers should prioritize the prudent and productive utilization of borrowed funds. External debt should be channeled into high-impact sectors such as infrastructure, manufacturing, and financial sector deepening initiatives, while maintaining strict debt sustainability frameworks to avoid excessive debt accumulation.
Keywords: diaspora remittance, external foreign direct investment, findx, foreign inflows