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. 10 NO. 10 2024
DOI: 10.56201/ijebm.v10.no10.2024.pg155.166

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The Nexus between Unemployment and External Sector Variables in Nigeria: An ARDL Approach

EWUBARE DENNIS, Rosemary Chioma

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Abstract

This paper examined the impact of external sector variables on unemployment in Nigeria from 1985 to 2022. The study employed the Autoregressive Distributed Lag (ARDL) method in estimating the time series data obtained from the World Development Indicators. The findings of the study were that; exchange rate had mixed effect on UNP in the short run while at 5 percent level while foreign direct investment reduced unemployment rate in the short run. However, in the long run they were found to increase the rate of unemployment in the country at 5 percent significance level. Official development assistance on the other hand, showed no evidence of influence on unemployment in the long run, however, in the short run, it significantly increased the level of unemployment in the country. Following this, the study recommended that, the Nigerian government should make sure that measures are taken to fortify and expand institutions to prevent donor agencies' efforts to combat unemployment from being redirected or siphoned for private gain.

keywords:

Unemployment rate, External sector, ARDL approach

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