IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 2 NO. 1 2016

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DOES EARNINGS FROM EXPORTS REDUCE OR AGGRAVATE POVERTY AND UNEMPLOYMENT IN NIGERIA

LUCKY OTAME

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Abstract

The main purpose of this paper is to quantitatively examine the impact of export earnings and exchange rate on the macroeconomic variables of poverty and unemployment using the statistical tool of co-integration in a modified ordinary Least Square (OLS) framework) in order to avoid spurious results, and hence, make for more meaningful and robust analysis. The regression results show that about 39% variation in unemployment level and 38% of the total change in poverty rate are explained or attributable to export earnings (oil and non-oil), inflation rate, exchange rate and the country’s degree of openness. Specifically and as expected, oil exports make positive contribution to both poverty and unemployment reduction while non-oil exports, exchange rate and the country’s degree of openness (against expectations) seem to aggravate unemployment. With the worsening trend in both poverty and unemployment levels in the country and with about 70% (world bank) of the population living below the poverty line and engaged in the agricultural sector, the reasons for this may not be far – fetched: The gain from non-oil exports are not trickling down to the masses and down- trodden. This might not be unconnected with systemic corruption, inability of farmers to access agricultural loans, inequitable distribution of wealth among others. The study therefore recommends that the fight against corruption should be sustained and strengthened. Mass education on modern agricultural techniques and positive parenthood/ family planning enlightenment campaigns for the rural poor is also recommended in order to reduce the incidences of too many dependants on a few Above all, critical steps should be taken to address the high rate at which the naira has depreciated against international currencies such as the US dollar and the British pounds sterling since 2014. In addition, income inequality prevalence in the country should be critically looked into with a view to addressi

keywords:

Co-integration; degree of openness; poverty, Unemployment; Trade policies

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