CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

This chapter gives a detailed summary of findings in the study, presents the conclusion as

well as necessary policy recommendations on the effects of poverty levels influence on

economic growth in Nigeria from 1990 – 2022.

5.1 Summary

The descriptive and trend analysis revealed that Nigeria poverty headcount ratio and real

GDP per capital show different pattern over the period of study 1990 to 2022. Poverty was rose

to approximately 58.4percent in 1996 after which it slows downward closer to 30percent in 2022,

while the real GDP per capita was not stable as evidence by a negative growth in the early 1990s,

a little increase of 12 percent in 2001 and stagnation nearly zero growth during 2015 and 2019.

Additionally, the descriptive statistics showed that poverty level are randomly distributed around

the mean (43.01 percent) with standard deviation of 9.71 in which the GDP per capital spread

widely at mean of 1.60 percent, standard deviation of 3.76, and little right-skewed. Inflation rate

and unemployment rate indicated that they are rightward skew, this shows that the periods are

characterized by hyperinflation. The kurtosis value indicates a leptokurtic distribution,

suggesting a high number of extreme values which signifies episodic most especially in inflation,

whereas government expenditure which is also rightward screw indicated periodic fluctuation in

spending.

However, the unit-root, cointegration, and ARDL analyses explains the dynamic

relationship among poverty levels, economic growth, and key macroeconomic variables. The

unit root test results indicate that the GDP growth rate has a t-statistic less than the 5% critical
value which suggest that it is stationary at levels (I(0)). In contrast, the poverty level indicated a

non-stationarity, but becomes stationary after first differencing with a t-statistic. Also,

government expenditure shows a t-statistic indicating non-stationarity, but is stationary after

differencing with a t-statistic. The Unemployment Rate is stationary at levels with a t-statistic

and this shows that it is statistically significant on GDP growth. Collectively, GDPG and Unemp

are I(0), while POV, GovExp, and INF are I(1), this complemented the reason for choosing the

econometric modeling methods used in the study.

Furthermore, the correlation analysis provides insights into the relationships between

economic growth, poverty levels, government expenditure, inflation, and unemployment in

Nigeria. It shows a very weak positive relationship between the annual growth rate of real GDP

per Capita and Poverty Level with a correlation coefficient of 0.031 which implies that changes

in GDP growth do not significantly impact poverty levels. The relationship between government

expenditure and Poverty Level reflects a strong negative relationship which implies that as

government expenditure increases, poverty levels tend to decrease significantly. Also, inflation

rate and poverty level have a moderate positive relationship with 0.408 correlation coefficient

showing that there is higher inflation rates are associated with increased poverty levels and this

could lead significant reduction in purchasing power and disproportionately affect low-income

households. In addition, the unemployment level is negatively correlated with both GDP growth

with –0.519, while in contrast positively correlated with poverty –0.467. This shows the

significance of creating jobs as a measure to tackle poverty and foster growth in the economy.

Collectively, these findings suggest that while poverty reduction and government expenditure are

important for social welfare, the aggregate macroeconomic stability mostly requires the
maintenance of low and stable inflation and adequate policies which facilitate employment will

directly lead to sustainable economic growth in Nigeria.

5.2 Conclusion

This study has examined the effects of poverty levels influence on economic growth in

Nigeria from 1990 – 2022. The results shows that economic growth, as proxied by the terms of

poverty gap index, government expenditure, private investment, inflation rate, and

unemployment rate are greatly influenced as result of the significant effect on poverty levels in

Nigeria. The empirical evidence shows that poverty headcount ratios may have significantly drop

from the 1996 peak of 58.4 percent to nearly 30 percent during 2022. However, in the long run,

this fall was not accompanied by an increase in per-capita GDP growth. Also, the ARDL result

shows that in relation to the short run, an attempt to change government expenditure, inflation,

and unemployment will significantly affect the growth rate and that the economy adjusts quickly

the differences in its long-run equilibrium which is evident in the error-correction coefficient of –

0.845. Also, in the long-run specification, neither changes in poverty levels nor government

spending exert a statistically significant impact on GDP growth; instead, inflation emerges as the

only robust determinant, with a 1 percent rise in inflation associated with an average 0.3466

percent contraction in growth. These findings suggest that poverty reduction, while essential for

social welfare, is not by itself sufficient to drive sustainable economic expansion without broader

macroeconomic stability and effective policy interventions.

Moreover, the correlation matrix underscores that government expenditure correlates

strongly and negatively with poverty (–0.910), indicating its potential as a poverty-alleviation

tool, while inflation and unemployment are positively associated with poverty and negatively

associated with growth. The negligible direct correlation between growth and poverty (0.031)
further highlights the disconnect between aggregate economic performance and poverty

reduction outcomes. Consequently, this study concludes that Nigerian policymakers must pursue

a dual strategy: first, maintain price stability and low inflation to safeguard growth; and second,

design targeted poverty-reduction programs financed through efficient and transparent public

spending that directly uplift vulnerable populations. Additionally, fostering job creation and

improving the quality and allocation of government investments in human capital and

infrastructure will be critical to ensuring that reductions in poverty translate into meaningful and

sustainable economic growth.

5.3 Policy Recommendations

In light of the above findings, the following recommendations are proposed to reduce the

poverty levels and foster sustainable economic growth in Nigeria:

i. For poverty to be significantly reduced, or managed as the case may be, the

government should include the poor more in its' spending, this can be achieved by

spending more on labour-intensive sectors of the economy, which are mainly the

agricultural and the manufacturing sectors.

ii. Also, economic growth and government spending should be directed at the poor,

mostly by providing the basic amenities, especially good infrastructures, financial

benefits and aids to families with dependent children, and old people, also, medical

aids should be available for the poor at a highly subsidized rate, if not free.

iii. As a way of reducing the level of unemployment in the country, more enabling

environment for private institutions and enterprise should be a priority. In other

words, both the formal and the informal sectors should be enriched and enlarged,
 thereby affecting their growth and expanding the businesses; hence, more people will

be employed, and economically engaged, and poverty level will reduce.

iv. The governments should raise minimum wage, create more employment

opportunities, invest in quality and universal education, expand health and medical

care, and provide easy access to the political process to reduce the poverty rate in the

country.

v. A going-concern attribute should be reflected by the government of Nigeria and not

personal initiatives that can be jettisoned at any time.

vi. Government should introduce policy that will make it compulsory for working age

population who had no formal education to enroll in any government training centre

across this country to learn a trade. This will help reduce level of unemployment and

poverty rate in the society.