Entrepreneurship, inclusive growth and poverty reduction in Nigeria

Abstract

This study empirically examined the dynamic relationship between entrepreneurship development, inclusive growth, and poverty reduction from 1990 to 2021, driven by the need to address Nigeria's ongoing poverty. Using data from the World Bank and the Central Bank of Nigeria, the study aimed to establish a causal relationship between these variables using strong econometric techniques, such as the Granger causality test and the Fully Modified Ordinary Least Squares (FMOLS). The main conclusions showed that, contrary to popular opinion, entrepreneurship had a negative and negligible effect on poverty, whereas inclusive growth had a significant negative effect, demonstrating the effectiveness of entrepreneurship in reducing poverty. Additionally, it was discovered that entrepreneurship significantly and negatively affected inclusive growth. The results of the causality tests indicated a two-way relationship between poverty and inequality and a one-way relationship between entrepreneurship and poverty. Based on these findings, the study suggests that, in order to increase innovation and productivity, strategic investment in science and technology should go beyond simple entrepreneurial promotion. To guarantee that public funds are used efficiently for inclusive economic development, it also supports increased stimulus spending to generate employment and a crucial bolstering of anti-corruption organizations like the EFCC and ICPC.