EVALUATING THE IMPACT OF SELECTED ECONOMIC AND INSTITUTIONAL FACTORS ON POVERTY LEVELS IN NIGERIA

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Published Dec 31, 2024
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Vol. 7 No. 2 (2024): December 2024

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Idris ABUBAKAR
Department of Economics, Edo State University Uzairue, Km 7, Auchi –Abuja Road, Uzairue, Edo State, Nigeria
https://orcid.org/0000-0001-9265-1203
Muhammed A. OBOMEGHIE
Department of Statistics, Auchi Polytechnic, Auchi, Edo State, Nigeria

Abstract

Poverty denies individuals access to crucial resources like food, shelter, healthcare, and education, which in turn lowers overall productivity and economic potential. This research investigates the influence of economic and institutional factors on poverty rates in Nigeria through quantitative methods, utilizing time series data spanning from 1996 to 2024. The study employed autoregressive distributed lagged (ARDL) and error correction model (ECM) estimation techniques. Results indicate that access to finance significantly decreases poverty rates at the 5% level of significance by enabling marginalized groups to invest in education, healthcare, and entrepreneurial ventures. Innovation also reduces poverty by stimulating economic growth and opportunities and is statistically significant at the 5% level of significance. Foreign direct investment (FDI) has a negative impact on poverty rates by generating employment and transferring knowledge and technology, also statistically significant at the 5% level of significance. While corruption was not immediately significant, it showed a long-term significant effect. The study concludes that addressing these economic and institutional factors is a key to sustainable poverty reduction in Nigeria. Policy recommendations include improving financial inclusion, fostering innovation, enforcing strict anti-corruption measures, and creating an environment conducive to FDI to drive long-term economic development and poverty alleviation.

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