Effect of Macroeconomic Policies on Poverty Alleviation in Nigeria: 1990-2017

Abstract

This study was carried out to empirically examine the effect of macroeconomic policies on poverty level in Nigeria from 1990-2017. The persistent and high level of poverty in Nigeria despite the adoption and implementation of various macroeconomic policies is the motivation behind this study. Three variables are used in this study which are Poverty level (POV), Unemployment Rate (UMP), Government expenditure (GEX), interest rate (INR) and money supply (MS). The variables were subjected to unit root test and they were all stationary at first difference I(1). Using the Johansen test, the variables were found to be cointegrated at 1% level of significance. The method of data analysis used was the ordinary least squares technique. The ordinary least squares result obtained showed that money supply and government expenditure had a negative impact on poverty level in Nigeria, with the relationship being statistically significant. The result is consistent with so many researches done in this regard. Government capital expenditure and money supply have a negative impact on unemployment rate in Nigeria and the impact is significant. From the conclusion, the recommendations made include; Since government capital expenditure has a negative impact on poverty level, emphasis should be laid on increasing government capital expenditure especially those meant for development programs and projects. This will reduce poverty level in the country.