Economic Growth, Poverty and Income Inequality Matrix in Nigeria: A Further Investigation

Authors

H. O. Okafor, Central Bank of NigeriaFollow

Publisher

Central Bank of Nigeria

Keywords

Variance Decomposition, Impulse Response Function, Equity, Macroeconomic Stability

Abstract

This paper examined the existing relationship among economic growth, poverty and income inequality in Nigeria. Using the Vector Auto-regressive (VAR) model and the Engle-Granger technique to test for the causality existing among the variables, the results revealed that economic growth had no impact on poverty reduction and income distribution in Nigeria due its non-inclusive nature. There was, however, evidence of a unidirectional causality, running from income inequality to increased poverty. This implied that inequality would lead to increase in poverty in Nigeria. Therefore, the paper recommended that government should develop stronger economic institutions that are capable of reorganising the productive base and reward system in the economy so as to promote and guarantee economic efficiency, equity and macroeconomic stability and inclusive growth.

Author Bio

The author is a staff of the Macroeconomic Modeling Division of Research Department, Central Bank of Nigeria

Publication Title

CBN Economic and Financial Review

Issue

1

Volume

54

Recommended Citation

Okafor, H. O. (2016). Economic Growth, Poverty and Income Inequality Matrix in Nigeria: A Further Investigation. CBN Economic and Financial Review. 54(1), 25-44