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This study examines the impact of poverty on economic growth in Nigeria from 1981 to 2024. Despite periods of robust economic expansion, Nigeria continues to experience high and persistent poverty rates, reflecting the country’s enduring growth–poverty paradox. Using annual time-series data obtained from the World Bank, National Bureau of Statistics, and Central Bank of Nigeria, the study employs the Autoregressive Distributed Lag (ARDL) model and Error Correction Mechanism (ECM) to analyze both short-run and long-run relationships between poverty and growth, alongside other macroeconomic variables such as
unemployment, inflation, foreign direct investment, and government expenditure. The results reveal that poverty exerts a significant and negative impact on real GDP in both the short and long run, indicating that high poverty levels constrain Nigeria’s productive capacity and weaken economic performance. Granger causality tests further show a unidirectional causal relationship running from poverty to economic growth, implying that poverty significantly predicts variations in output, whereas growth alone does not substantially reduce poverty. The findings highlight that without inclusive policies targeting poverty reduction, economic growth in Nigeria will remain uneven and unsustainable. The study recommends enhanced social investment, employment generation, human capital development, and equitable income distribution as vital strategies to break the poverty–growth trap and promote broad-based economic progress.
unemployment, inflation, foreign direct investment, and government expenditure. The results reveal that poverty exerts a significant and negative impact on real GDP in both the short and long run, indicating that high poverty levels constrain Nigeria’s productive capacity and weaken economic performance. Granger causality tests further show a unidirectional causal relationship running from poverty to economic growth, implying that poverty significantly predicts variations in output, whereas growth alone does not substantially reduce poverty. The findings highlight that without inclusive policies targeting poverty reduction, economic growth in Nigeria will remain uneven and unsustainable. The study recommends enhanced social investment, employment generation, human capital development, and equitable income distribution as vital strategies to break the poverty–growth trap and promote broad-based economic progress.
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