FOREIGN DIRECT INVESTMENT, TRADE OPENNESS AND POVERTY REDUCTION IN NIGERIA

ABSTRACT

The study is on the effect of foreign direct investment and trade openness on poverty reduction in Nigeria within the period of 1991 to 2022. The study adopted the fully ordinary least squares (FMOLS) econometric technique. The outcome of the study revealed that there is a positive significant relationship between trade openness and poverty reduction in Nigeria. Also, there is a negative and insignificant relationship between foreign direct investment and poverty reduction in Nigeria. Lastly, there is a positive significant relationship between foreign portfolio investment and poverty reduction in Nigeria. The study however recommends that the government should step up initiatives to attract foreign direct investment. This includes maintaining a stable political and economic environment, managing FDI inflows effectively and diversifying them away from the oil sector, as well as enhancing the country's infrastructure and security at all levels. To encourage investors, improve the convenience of doing business, and simultaneously raise the inflow of foreign direct investment, tariffs, import charges, and export duties should also be eliminated. Additionally, government should adopt initiatives to combat poverty, lower inflation to a single digit rate, and take advantage of the advantages of open trade.