IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF SOCIAL SCIENCES AND MANAGEMENT RESEARCH (IJSSMR )

E-ISSN 2545-5303
P-ISSN 2695-2203
VOL. 11 NO. 1 2025
DOI: 10.56201/ijssmr.vol.11no1.2025.pg.289.304

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Effect of Foreign Trade: An Econometric Analysis on Poverty Level in Nigeria

Victor AKIDI

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Abstract

This study empirically explored the effect of foreign trade on poverty level in Nigeria from 1985 to 2022. To achieve this goal, total export and total import were selected as foreign trade indicators, with foreign direct investment and official development assistance as external resource flow support variables while poverty index is utilised as measure of poverty level in Nigeria. Yearly series data were sourced mainly from Central Bank of Nigeria (CBN) Statistical Bulletin and Word Development Indicators (WDI), and the Autoregressive Distributive Lag (ARDL) analytical procedure were applied for estimation. It is thus established that total export and foreign direct investment had negative and substantial effects on poverty index in Nigeria, total import had positive and substantial effects on poverty index in Nigeria and official development assistance inversely but insignificantly influenced poverty index in the country. Predicated on these findings, it is concluded that the adopted foreign trade indicators are unavoidably vital for reducing poverty level in Nigeria. Accordingly, among others, the study recommended that Nigerian government should focus on diversifying its export base beyond crude oil by developing the non-oil sectors, encourage foreign direct investments and more development assistance inflows to further strengthen poverty reduction actions in the country.

keywords:

Foreign Trade Indicators, Foreign Direct Investment, Official Development Assistance, Poverty

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