Trade Policy Reforms and Rural Poverty in Nigeria

Philip C. Omoke

No 331445, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: This paper examines the impact of tariff reform and currency devaluation on rural poverty and inequality in Nigeria using a computable general equilibrium framework. Specifically, it examines the rural inequality implications of a gradual phasing out of import duties (trade liberalisation) and a market determined exchange rate regime. The Study observed that trade liberalisation reduces rural real wage and rural income leading to higher labour demand with worsening inequality. Currency devaluation was observed to raise the domestic price of imports leading to better terms of trade for the urban import competing sector. Rural terms of trade also improved but this did not translate to higher par capital rural income and higher rural real wage. Rural inequality was observed to further deteriorate. Hence, the study calls attention to the fact that the policy of trade liberalisation should be complemented with appropriate macroeconomic and sectoral policies that will ensure that gains from trade are equitably distributed.

Keywords: International Relations/Trade; Food Security and Poverty (search for similar items in EconPapers)
Pages: 24
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331445

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