Implications of Free Trade Area For Poverty, Household Welfare And Economic Development In Nigeria

Idris Abubakar; Thomas onimisi Abaukaka; Muhammad Kabir O. Momoh

doi:10.36923/ijsser.v3i3.88

Open Access Article Economics

Idris Abubakar ⁽¹⁾, Thomas onimisi Abaukaka ⁽²⁾, Muhammad Kabir O. Momoh ⁽³⁾

(1) Department of Economics, University of Abuja FCT, Abuja, Nigeria, Nigeria,

(2) Department of Economics, Federal College of education, Okene, Kogi state, Nigeria., Nigeria,

(3) General Studies Department, Auchi polytechnic, Auchi, Edo state, Nigeria. , Nigeria

https://doi.org/10.36923/ijsser.v3i3.88

Issue
Vol. 3 No. 3 (2021)

Submitted
July 7, 2021

Published
September 30, 2021

Keywords:

Free trade area, Income per capita, Poverty, Unemployment, Welfare, World Bank, Nigeria.

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Abstract

The purpose of this study is to examine the implications of free trade areas on poverty, household welfare, and economic development in Nigeria. Using a fully modified ordinary least squares (FMOLS) regression technique, the study analyzes key macroeconomic indicators, specifically income per capita to measure welfare and unemployment to assess poverty. Historical data covering 27 years were sourced from the Central Bank of Nigeria’s statistical bulletin to support the analysis. The findings indicate that export contributions to gross domestic product (GDP) and foreign direct investment (FDI) positively impact household welfare, as reflected in the increase in income per capita. Furthermore, both FDI and export contributions to GDP were found to have a negative relationship with unemployment, suggesting that participation in free trade areas can help reduce unemployment in Nigeria. The study concludes that engaging in free trade areas is likely to enhance household welfare and decrease poverty through reduced unemployment. These results have significant implications for policymakers, academics, researchers, and government officials. The study suggests that policies aimed at promoting FDI, increasing export contributions, and supporting GDP growth—such as tariff reductions, simplified trade regulations, increased credit availability for exporters, and the creation of duty drawbacks—can effectively improve household welfare, reduce poverty, and foster economic development in Nigeria.

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Authors

Idris Abubakar

Department of Economics, University of Abuja FCT, Abuja, Nigeria

https://orcid.org/0000-0001-9265-1203

idrisbakr@yahoo.com (Primary Contact)

Thomas onimisi Abaukaka

Department of Economics, Federal College of education, Okene, Kogi state, Nigeria.

https://orcid.org/0000-0002-4577-0899

Muhammad Kabir O. Momoh

General Studies Department, Auchi polytechnic, Auchi, Edo state, Nigeria.

https://orcid.org/0000-0003-3774-0769

Abubakar, I., Abaukaka, T. onimisi, & Momoh, M. K. O. (2021). Implications of Free Trade Area For Poverty, Household Welfare And Economic Development In Nigeria. Innovation Journal of Social Sciences and Economic Review, 3(3), 01–12. https://doi.org/10.36923/ijsser.v3i3.88

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