Does International Trade Reduce Poverty in Developing Nations? The Nigerian Experience

This paper explores whether international trade contributes to poverty reduction in developing nations, with a particular focus on Nigeria. While conventional trade theory predicts welfare gains from openness through specialisation, efficiency and access to larger markets, empirical evidence remains mixed. Nigeria, Africa’s largest economy and a resource-dependent nation, provides a compelling case for examining this paradox. The paper adopts analytical approach, drawing data from secondary sources, particularly from CBN statistical bulletin. This study applied the technique of generalized method of moments on data such as poverty rate (dependent variable), export trade, import trade, customs duties and tariff (independent variables) from 1990-2023. The empirical result showed that, export trade and customs duties all have negative effect on poverty level. Thus, they help to reduce poverty level. On the other hand, tariff has positive and significant impact on poverty level. But import trade has positive effect on poverty level. Therefore, the study concludes that, to a grate extent international trade significantly reduces poverty in Nigeria during the period of study. Based on the findings, it was recommended that, export diversification, investment in labour-intensive sectors, and complementary social policies should be upheld in order to ensure that trade benefits are widely shared.