Structural Transformation, Poverty and Inequality in Nigeria: An ARDL Bound Testing Technique

  •  Ismaeel Ibrahim Naiya    
  •  Turkhan Ali Abdul Manap    


Poverty has been a daunting global issue since the Industrial Revolution. Despite the economic successes achieved in the world, efforts to reduce poverty became prostrating in many countries. Although economists have, for long, recognized the significant role of structural transformation in economic growth and development of any economy, studies linking it with poverty and inequality are quite scanty. This paper uses ARDL bound testing technique to investigate the interrelationship among structural transformation, growth, inequality and poverty using Nigerian data. The results show that despite very low rate of structural transformation in Nigeria, there exists long-run relationship among the variables in the study. The insignificance of the structural transformation variable in the model indicates that the structural transformation is very slow in the country. The transformation that started in Nigeria in the early 1960s was disrupted by the emergence of oil as the mainstay of the economy leading to neglect of the other real sectors by the government. The failure of making best use of revenues from oil to support structural transformation of the economy led to the ‘paradox of plenty’, a rich country with lots of poor people.

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