The Impacts of Trade Liberalization on Poverty in Nigeria: Dynamic Simulations in a CGE Model

Manson Nwafor, Adeola Adenikinju and Kanayo Ogujiuba

Working Papers MPIA from PEP-MPIA

Abstract: The study examines the effects that trade liberalization will have on poverty in Nigeria. Previous studies have been limited by static and partial equilibrium analysis. We use a Dynamic Computable General Equilibrium Model to analyze this issue. The more favorably affected sectors are capital intensive; therefore, capital income improves over time while land and labor income reduce. This has positive implications for urban households and negative implications for rural households due to the dependence of the latter on mostly land and labor income. As a result, urban poverty decreases in the short and long run while rural poverty increases in both periods. Policies to improve the agricultural sector will thus have to be implemented before or concurrently with trade liberalization in order for it to have a pro-poor effect. In this way, the rural areas which obtain most of their income from this sector will respond more positively to trade liberalization.

Keywords: CGE Model; Trade liberalisation; Nigeria; Poverty; Dynamic; ECOWAS; Import tariffs (search for similar items in EconPapers)
JEL-codes: C68 D58 F13 I32 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-afr, nep-agr, nep-cmp, nep-dev and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:lvl:mpiacr:2007-16

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