Trade, Poverty and Sustainable Development in Nigeria : A Dynamic Analysis

This study investigates the relationship between trade, poverty and sustainable development in Nigeria for the period 1980-2013. The paper uses Autoregressive Distributed Lag (ARDL) technique for examining the long-run equilibrium condition and a re-parameterized framework to capture the short-run dynamics. The results show that long-run equilibrium condition exists between trade and sustainable development, on the one hand, and trade and poverty, on the other. Interestingly, the results also indicate that the relationship between trade, poverty and sustainable development is more of a dynamic nature than static as the lagged dependent variables are significant. It is observed that though development is highly sustainable and poverty is fairly alleviating as the recovery back to equilibrium when affected by shock is fast. But a striking result shows that trade only matters for sustainable development and not for poverty reduction in Nigeria. The growth process of the Nigerian economy is the major driver for poverty reduction, as it significantly increases the per capita income. Again, the results obtained indicate that only optimum levels of government involvement, exchange rate and economic growth that will not aggravate poverty and at the same time will also stimulate sustainable development, are desirable