Oil Price Fluctuation, Macroeconomic Indicators and Poverty in Nigeria - Research

The fluctuations in the oil price over the years have created uncertainties and unsustainability of economic growth, and these have reinforced poverty through several channels, especially in developing economies. This study explored the impact of oil price movement and other macroeconomic indicators on poverty in Nigeria between 1980 and 2018. The Autoregressive Distributed Lag (ARDL) estimating technique was utilized to investigate both the short run and long run impact of oil price fluctuations on the poverty rate in Nigeria. The estimation results show that oil price volatility has a positive and statistically significant effect on poverty rate both in the short run and in the long run. The estimation results also shows that interest rates and growth in gross domestic product have a statistically significant and positive effect on poverty rate in Nigeria. The study therefore concluded that though Nigeria is experiencing economic growth, the growth is not inclusive. The study therefore recommends that the Nigerian government diversify, attract and encourage investors into the other sectors of the economy that are less susceptible to oil price fluctuations as alternative sources of income. It is also recommended that the monetary authorities efficiently use the interest rates in times of oil price movements to ensure that economic growth is not compromised, hence reducing the incidence of poverty in Nigeria.