Examining The Relationship Between Foreign Debt And Poverty Reduction In Nigeria: Quantile Analysis From 1980-2019

Abstract

This study use quantile regression to examine the foreign assistance for development, external debt as in stock and real effective exchange rate means a consumer basket of goods and services average effect on poverty reduction in Nigeria. The result of quantile regression reveals that foreign aid is positive and statistically insignificant. While external debt and real exchange rate are significant and positive. There is the existence of an average short, medium and long term relationship between foreign debt, aid and exchange rate on poverty reduction. At the same time, foreign debt has a negative and significant average effect on poverty reduction in the short term. Also, foreign aid shows a positive average but insignificant relationship in the short and long term, exchange rate indicates negative and statistically significant relationship in short and long-run on poverty reduction. It implies funds from borrowing and aids can impact on national development plans inclusive poverty reduction.