Impact of Foreign Sector Aggregates and Poverty Reduction in Nigeria

Ewubare Dennis; Rosemary Chioma

doi:10.56201/ijefm.v9.no8.2024.pg77.88

📄 Download Paper

Impact of Foreign Sector Aggregates and Poverty Reduction in Nigeria

Ewubare Dennis, Rosemary Chioma

Abstract

The study analysed the effect of foreign sector aggregates on poverty reduction in Nigeria between the period of 1987 and 2022. Annual times series data on poverty headcount (POV), exchange rate (EXR), foreign direct investment inflows (FDI), official development assistance received (ODA), and external debt (XDT) were subjected to Augmented Dickey-Fuller (ADF) Unit Root test, auto-regressive distributive lag (ARDL) estimation and diagnostic tests. The result of the study indicated that at 5 percent level, EXR, FDI, ODA, and XDT significantly influenced the level of poverty in Nigeria in the short run. Further, EXR, FDI, and XDT significantly reduced poverty in Nigeria in the long run. On the other hand, there was no statistical evidence that ODA significantly influenced poverty level in the long run. The result of the diagnostic test showed that the model had structural stability and was free from the problems of serial correlation, heteroscedasticity, and misspecification error. However, the study suggested that government and policymakers in Nigeria should strategize and enact guidelines that will correct the positive effect foreign direct investment and external debt have on the level of poverty in the short term.

Keywords

Poverty reductionExternal sectorNigerian economyARDL

References

Adenuga, F. A. & Nor Azam, A. R. (2016). Currency devaluation and poverty in Nigeria. International Journal of Business Quantitative Economics and Applied Management Research, 3(4), 55-62. Agbedi, M. & Virtanen, P. (2017). Dependency theory – A conceptual lens to understand China’s presence in Africa? Forum for Development Studies, 44, 1-23. Balcilar, M., Kutan, A. M. & Yaya, M. E., (2017). Testing the dependency theory on small island economies: The case of Cyprus. Economic Modelling, 61, 1-11. Bakare, A.S., 2011. The macroeconomic impact of foreign aid in Sub-Saharan Africa: The case of Nigeria. Business and Management Review, 1(5), 24-32. Central Bank of Nigeria, (2013). “Central Bank of Nigeria Statistical Bulletin”, vol. 23, Federal Republic of Nigeria. Ewubare, D. & Okpoi, G. E. (2018). International remittances and poverty reduction in Nigeria. Journal of Applied Economics and Business, 6(2), 5-24. Ferraro, V. (2008). Dependency theory: An introduction. The Development Economics Reader, 12(2), 58 - 64. Greg, N. (2006). Exchange Rate Stability and Poverty Reduction in Nigeria. Central Bank of Nigeria Bullion, 20(3). Hemmer, H., & Phuong Hoa, N. T. P. (2002). Contribution of Foreign Direct Investment to Poverty Reduction: The Case of Vietnam in the 1990s. Entwicklungsökonomische Diskussionsbeiträge, No. 30, Justus-Liebig-Universität Gießen, Professur für Volkswirtschaftslehre und Entwicklungsländerforschung, Gießen. Joshua, U.., Adedoyin, F. F. & Sarkodie, S. A. (2020). Examining the external-factors-led growth hypothesis for the South African economy. Heliyon, 6,1-8. Nanfa, N., Ajang, J. D., Timnan, B. N., Azi, I. M., Diemsan, A. A., Magit, E. D. & Salami, J. O. (2023). Effect of public debt on poverty reduction in Nigeria: evidence from highly indebted country. International Journal of Social Science and Economic Research, 8(6), National Bureau of Statistics. (2012). The Nigeria Poverty Profile 2010 Report. Federal Republic of Nigeria. N?dri, K. D. (2017). Contribution of Official Development Assistance to Poverty Alleviation In The ECOWAS. Journal of Economics and Finance, 2(1), 37-49. Ochalibe, A. I., Awoderu, B. K. & Onyia, C. C. (2017). External debt and economic development: policy implications and poverty reduction in Nigeria. International Journal of Academic Research and Reflection,5(1), 1-15. Omojimite, B. U. & Oriavwote, V. E. (2012). Empirical assessment of the real exchange rate and poverty in Nigeria. Asian Economic and Financial Review, 2(1), 244-254. Prebisch, Raul, 1950. The economic development of Latin America and its principal problems. Economic Bulletin for Latin America, 7(1), 385–421. Tsaurai, K. (2018). Investigating the impact of foreign direct investment on poverty reduction efforts in Africa, Revista Galega de Economia, 27(2). 139-154. UNCTAD (2012). World Investment Report. New York: United Nations.

Impact of Foreign Sector Aggregates and Poverty Reduction in Nigeria

Abstract

Keywords

References

More Articles from INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT