Abstract

Nigeria has vast economic potential, but this has not translated into significant poverty reduction. This paper examined foreign direct investment and household poverty reduction in Nigeria from 1990 to 2024. The model for this paper was the ARDL designed to capture both the long run and the short run dynamics The Granger causality test was used to trace the direction of causality between foreign direct investment and household poverty reduction in Nigeria. The findings showed that foreign direct investment had insignificant negative impact on household poverty while inflation rate, exchange rate, growth rate of GDP and institutional quality had significant roles in determining the level of household poverty in Nigeria. The result of the Granger causality test showed absence of direction of causality between FDI and household poverty. Based on the results, this paper recommended the need to invest more in infrastructure, education, and innovations.

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