ROLE OF ECONOMIC GROWTH IN POVERTY REDUCTION IN NIGERIA

Abstract

This study examined the effect of economic growth on poverty in Nigeria. The study was informed by the rising poverty level in the country, despite concerted efforts made by government towards poverty reduction. It explored the relationship between economic growth and poverty reduction in Nigeria by identifying components that influence economic growth in various sectors of the economy. In order to address the problem, time series data covering the period 1990 to 2023 was used to estimate the variables in the model. Autoregressive Distributed Lag (ARDL) model was used to estimate the regression equation. It was found that gross capital formation has negative and insignificant impact on poverty reduction. This indicates the need for continuous investment in capital formation to boost industrialization, which enhance economic growth. The study found that economic growth has negative and significant impact on poverty reduction both in the short run and long run. Based on the findings, it was recommended that poverty reduction policies that enhance economic growth through expansion of employment opportunities, agricultural productivity, raising investment and improving the living standard of households should be encouraged in the country.