IMPACT OF THE PETROLEUM SECTOR ON POVERTY REDUCTION IN NIGERIA

This research investigates the intricate relationships between the petroleum sector, poverty reduction, and income inequality in Nigeria. Leveraging a comprehensive dataset spanning the period from 1990 to 2022, the study employs advanced econometric techniques, including Autoregressive Distributed Lag (ARDL) modeling, Granger causality tests, and Vector Error Correction Model (VECM) analysis. Descriptive statistics and correlation analyses reveal key patterns in the data, emphasizing the dynamic interplay between petroleum revenue, oil prices, poverty levels, and income inequality. The Augmented Dickey-Fuller (ADF) unit root tests establish the stationarity of key variables, laying the foundation for robust econometric modeling. The ARDL model uncovers nuanced relationships, indicating that while petroleum revenue positively impacts poverty levels, income inequality exerts a counteracting influence. Granger causality tests shed light on temporal dynamics, emphasizing the directional influence of petroleum revenue on poverty levels. The VECM analysis reveals enduring cointegration, underscoring the need for sustained policy interventions. This study contributes valuable insights for policymakers seeking to design effective strategies for poverty reduction and inequality mitigation in regions dependent on the petroleum sector. The recommendations emphasize economic diversification, targeted poverty alleviation programs, inclusive growth policies, and environmental and social responsibility. The findings not only deepen our understanding of the complex dynamics at play but also provide a foundation for future research and informed policymaking in the pursuit of sustainable and inclusive development.