An Empirical Analysis Of The Impact Of Macroeconomic Policies, Unemployment On Poverty In Nigeria: 1990-2016

Authors: Akomolafe, Femi Augustine; Agunbiade, Olabode; Ndayako, Hafsat Sanda
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The study analysed the impact of macroeconomic policies, unemployment on poverty in Nigeria and employed Ordinary least Squares (OLS) method. The variables used are: Unemployment rate (UNM), Poverty Rate (POR), Exchange rate (EXC), Interest rate (INR), Government Expenditure (GXP) and Money Supply (MS). The variables underwent unit root test using the Augmented Dickey-Fuller (ADF) test. POR, INR and MS were stationary at first difference I(1) while UNM, EXC and GXP were stationary at second difference I(2). The Johansson cointegration indicates five cointegrating equations and this implies POV, INR, MS, EXC GEX and UNM have longrun relationship i.e. they all move in the same direction in the longrun. The results revealed that unemployment rate causes poverty in Nigeria and increases in unemployment will lead to increases in poverty level. Also, government expenditure reduces poverty incidence in Nigeria but money supply increases poverty level in Nigeria which may occur as result of the economy not being able to absorb money in circulation and leads to inflation, thereby making the incidence of poverty inevitable. In the case of interest rate, there is a significant relationship between interest rate and poverty. The study concludes that macroeconomic policies such as money supply, government expenditure, exchangerate, unemployment rate and interest rate have statistically significant impacts on poverty level in Nigeria. Hence, recommend that macroeconomic policies such as expansionary fiscal and contractionary monetary policy should be pursued to regulate money supply and reduce poverty level in Nigeria.