Economic Growth Dynamics and the Poverty Paradigm in Nigeria: Global Shocks, Structural Vulnerabilities, and Policy Uncertainty

Nigeria occupies a paradoxical position in global development discourse: it is Africa's largest economy by nominal GDP, yet it simultaneously harbors one of the world's largest concentrations of extreme poverty. This paper examines the dynamic relationship between economic growth and poverty reduction in Nigeria over the period 1986–2025, incorporating seven control variables — global GDP growth, commodity prices (particularly crude oil), inflation, capital flows, investor sentiment, election cycles, and policy uncertainty — to disentangle the mechanisms that mediate or obstruct the growth-poverty nexus. Drawing on the Autoregressive Distributed Lag (ARDL) bounds testing approach within an error-correction framework, and augmented by the Fully Modified Ordinary Least Squares (FMOLS) estimator for robustness, the study finds that economic growth exerts a statistically significant but quantitatively modest effect on poverty reduction, particularly when commodity price booms mask structural fragility. Inflation and policy uncertainty emerge as the most potent poverty-amplifying forces, while capital flows exhibit asymmetric effects contingent on their composition — foreign direct investment reduces poverty more durably than portfolio inflows. Election cycles introduce significant short-run policy distortions that erode poverty-reducing gains. The paper provides empirical grounding for a recalibrated development strategy that prioritizes structural economic transformation, monetary discipline, institutional quality, and inclusive capital mobilization. These findings carry direct implications for policymakers, multilateral institutions, and development practitioners engaged with Nigeria and similarly resource-rich but poverty-stricken economies.