TRADE OPENNESS AND POVERTY REDUCTION IN NIGERIA: MYTH OR REALITY?

This research was inspired by the fact that despite the decades of liberalization in the Nigerian trade, the country continued to experience high poverty levels and the question was whether the trade liberalization (increased openness) had played a role in reducing poverty in Nigeria. The authors used trade openness as a proxy to determine how the level of poverty in Nigeria between 1981 and 2024 was influenced by trade openness in the form of import openness ratio (IOR), export openness ratio (EOR), and total trade openness (OPEN). The research was meant to give empirical support on whether integration into the world markets had bettered the standard of living of the Nigerian citizens. The study utilized the Autoregressive Distributed Lag (ARDL) research methodology, which tested the short and long-term dynamics between the outcome of poverty and trade openness measures. The research design was the ex-post facto research design. The study results revealed the importance of the fact that, though import and export openness was correlated with increasing poverty in the short run, its influence in the long run was oriented towards poverty reduction even though the level of statistical significance varied. Conversely, the aggregate trade openness varied with the direction, and it was found to be less associated with poverty in the short-term but likely to be more associated with poverty in the long-term because of the imbalance in the structure and weak connection domestically. The findings suggested that inclusive trade policy, domestic sector investment and social protection systems are important to maintain openness gains so that it can be evenly distributed among the different income groups in society.