Climate risk and global economic policy uncertainty asymmetric spillover on global energy mix

Abstract

Owing  to  the  increasing debt-to-GDP ratio  and  the  attendant  high  multidimensional  poverty  in Nigeria,  this  study  set  out  to  examine  the  role  of  external  debt  on  poverty  alleviation  in  Nigeria.  The  model constructed for the study proxies final consumption expenditure as the endogenous variable measuring poverty rate  as  a  function  of  external  debt  and  external  debt  service.  Annual  time  series  data  was  gathered  from  the World  Bank’s  World  Development  Indicator  (WDI)  from  1981  to  2021.  The  econometric  techniques  of the Autoregressive  Distributed Lag  (ARDL)  model,  Augmented Dickey-Fuller(ADF)  Unit  Root  test,  Bound  Co-integration test, and Error Correction Model (ECM) were engaged in the empirical analysis. The co-integration test shows that a long-run equilibrium relationship exists among the variables. The findings from the long-run result show that external debt has a significant positive impact on the poverty rate in Nigeria. The study gives some policy recommendations based on the findings.