The Effect of Trade Liberalisation on Poverty in Nigeria: A Micro–Macro Framework

Shuaibu, Mohammed

doi:10.1080/10168737.2016.1221984

Cited by 9 publications

(11 citation statements)

References 13 publications

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“…A coefficient of 0.01 means that a 1% increase (decrease) in world trade openness results in a 0.01 unitary (decrease) increase in poverty. The finding is in line with theoretical propositions linking trade to poverty alleviation through transmission mechanisms such as economic growth (Shuaibu, 2017) skill-biased technological change (Nissanke & Thorbecke, 2010) changes in prices faced by households (Winters et al, 2004), employment and wages (Goldberg & Pavcnik, 2007b). Empirically this is in tandem with several studies (including (Bayar & Sezgin, 2017;Kis-Katos & Sparrow, 2015;Onakoya et al, 2019;Zahonogo, 2016)).…”

Section: Generalised Methods Of Moments (Gmm) Estimation Resultssupporting

confidence: 84%

“…The equation says that poverty is a function of the ratio of agricultural goods to non-agricultural goods and the ratio of the price of agricultural goods to non-agricultural goods. Following transmission mechanisms through which trade affects poverty economic growth (Shuaibu, 2017) technological change (Nissanke & Thorbecke, 2010) changes in prices faced by households (Winters, McCulloch, & McKay, 2004) employment and wages (Goldberg & Pavcnik, 2007b) and empirical formulations (Kis-Katos & Sparrow, 2015;Onakoya et al, 2019;Pradhan & Mahesh, 2014;Zahonogo, 2016) we augment (1) by including trade liberalization, as proxied by trade openness ( ) to give;…”

Section: Theoretical Frameworkmentioning

confidence: 99%

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The Impact of Trade on Poverty in Sub-Saharan Africa: Do Sources Matter?

Sunge¹,

Kumbula²,

Makamba³

2021

International Journal of Business, Economics and Management

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Global trade development has provided noteworthy global poverty gains since the 1990s. Accordingly, Africa has gradually engaged itself in trade and trade policy reforms through multilateral and regional trade agreements among other initiatives. Nonetheless, poverty levels in the Sub-Saharan Africa (SSA) region remain relatively high. Recognizing that existing evidence on trade-poverty nexus is based on aggregate trade, we provide a new perspective on SSA by disaggregating trade by sources for the period 2003-2017. We employed the Generalised Method of Moments (GMM) estimation of a panel data model derived from the Modified Basic Household Model and Neo-Conservative Poverty Theory for analysis. The results document poverty gains from trade liberalization, with the extent varying according to sources. Specifically, trade from MENA and within SSA was found to offer more gains. Furthermore, findings suggest that poverty gains from trade are strengthened with better institutional quality. It follows that to accelerate poverty gains from trade liberalization, SSA should promote intra-Africa trade as well as trade with MENA countries. To accelerate the gains, Africa has to invest in better institutions, in particular, to improve governance and corruption eradication. Contribution/Originality:This study contributes to existing literature on trade-poverty nexus in two ways.Firstly, instead of basing conclusions on aggregate trade, we focus on trade by sources. We disaggregate SSA's trade by regional sources. Secondly, we introduce control of corruption interaction term to control for institutional quality in the analysis. INTRODUCTIONDespite the worldwide poverty rate having immensely reduced since 2000, poverty alleviation remains topical.The United Nations, through the Sustainable Development Goals (SDGs), places poverty eradication at the top of the global development agenda. SDG number one envisages ending extreme poverty in all forms by 2030. The African Union Commission (AUC) Agenda 2063's aspiration for "a high standard of living, quality of life and wellbeing for all citizens" (New Partnership for Africa's Development (NEPAD, 2019) targets an end to poverty as a priority. The World Bank and World Trade Organisation (WB and WTO, 2019) recognize trade liberalization as an avenue to eradicate poverty.

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Section: Generalised Methods Of Moments (Gmm) Estimation Resultssupporting

confidence: 84%

Section: Theoretical Frameworkmentioning

confidence: 99%

The Impact of Trade on Poverty in Sub-Saharan Africa: Do Sources Matter?

Sunge¹,

Kumbula²,

Makamba³

2021

International Journal of Business, Economics and Management

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“…Trade is a significant determinant of economic growth and development by making available goods and services, technology transfer, economies of scale, efficient utilization of resources, reducing unemployment (e.g. Cain et al, 2012;Le Goff & Singh, 2014;Tahir & Azid, 2015;Khobai et al, 2017;Shuaibu, 2017). Trade has recently received considerable attention in the literature due to its role in the development of the global economy, thereby becoming the most fastest-growing economic activity.…”

Section: Introductionmentioning

confidence: 99%

Relationship Between Governance and Trade: Evidence From Sub-Saharan African Countries

Dankumo

Ishak²,

Bani³

et al. 2020

RWE

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This paper investigates the effect of governance in Sub-Saharan African towards trade. This study utilized panel data from 1996-2017. This employed Pooled Mean Group approach by categorizing the Sub-Sharan African (SSA) countries into Low Governance Index (LGI) and Very Low Governance Index (VLGI) countries, considering its abundant resources. The results of the findings indicate that corruption does not affect trade in LGI countries but increases that of VLGI countries, signifying that corruption “greases the wheels” of trade in countries with a high rate of corruption. However, political instability reduces trade for LGI countries, whereas, in VLGI countries, it does not affect trade, indicating that political instability only impacts in countries with relatively better governance. Government expenditure, income, and population growth increase trade in LGI countries but does not show any evidence of impacting trade in the VLGI countries. The study concludes that governance (corruption and political instability) is a significant determinant of trade in the SSA; hence, the importance of dealing with corruption and ensuring a stable political environment.

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“…A perusal of the literature shows that there are many studies examining the effects of globalization or trade liberalization on different economies at the national, sectoral and household level. Many of studies are conducted for developing countries (Isik-Dikmelik [20]; Sheshan [21]; Tapolova [7]; Porto [9]; Castilho et al [22]; Nicita [4]; Hanson [23]; Marchand [6]; Shuaib [24]; Castilho et al [25]) and conclude that trade labialization has overall positive effects on economic growth. Empirical studies on the distribution of these effects, however, suggest that the benefits are usually unevenly distributed across regions, sectors and households (Sheshan [26]; Porto [27]; Castilho et al [22]; Nicita [5]; Boysen [28]; Gourdon et al [29]; Ianchovichina et al [30]; Kareem [19,31]).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Base on the assumption of non-homothetic individual preferences, trade liberalization benefits people in the poorer deciles more than those in the richer ones. An integrated microsimulation CGE model was adopted by Shuaib [24] with an aggregated 2006 social accounting matrix and 2003/2004 Nigeria Living Standard Survey to determine the effects of trade liberalization on poverty in Nigeria. His simulated results indicate a moderate poverty-reducing effect of agriculture and manufacturing sectors trade liberalization, in which the effect is relatively more pronounced in the urban centres.…”

Section: Literature Reviewmentioning

confidence: 99%

The Impact of Common External Tariffs on Household's Welfare in a Rich African Country with Poor People

Kareem¹

2018

Advances in Economics and Business

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The poverty impact of trade policy has been ambiguous because of their differential effects on economic agents due to the transmission mechanism through which they operate. In this context, this paper uses Nigeria's micro-and macroeconomic data to investigate the poverty effects of Common External Tariff (CET) of the Economic Community of West African States (ECOWAS). The poverty effects were evaluated from the perspective of households as producers and consumers. The empirical strategy proceeds with two steps: first, by determining the extent of the tariff pass-through to domestic prices; and lastly, evaluating the impact of the price change on household welfare. The findings indicate that domestic prices declined due to the higher tariff pass-through. This decline was higher in states closer to ports and borders, which face lower trade costs. The ECOWAS CET had net positive effects on the welfare of households, largely due to the gains from the expenditure basket. The expenditure gains from the adoption of the trade policy outweigh losses incurred in their purchasing power through lower income. Therefore, this study provides evidence that the price transmission mechanism, household characteristics and geographical location are important determinants in assessing trade policy effects in Nigeria.

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The Effect of Trade Liberalisation on Poverty in Nigeria: A Micro–Macro Framework

Cited by 9 publications

References 13 publications

The Impact of Trade on Poverty in Sub-Saharan Africa: Do Sources Matter?

The Impact of Trade on Poverty in Sub-Saharan Africa: Do Sources Matter?

Relationship Between Governance and Trade: Evidence From Sub-Saharan African Countries

The Impact of Common External Tariffs on Household's Welfare in a Rich African Country with Poor People

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