Abstract

Author:
Agama Omachi, Onum Friday Okoh

Doi: 10.26480/egnes.02.2025.132.137

This is an open access article distributed under the Creative Commons Attribution License CC BY 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

This study investigates the impact of sustainable financial services on poverty reduction in Nigeria using annual time series data from 1990 to 2023. Real Gross Domestic Product (RGDP) is used as a proxy for poverty reduction, while foreign direct investment (FDI), gross savings, population, and interest rates serve as independent variables. Employing the Autoregressive Distributed Lag (ARDL) model, the study captures both short-run dynamics and long-run relationships among the variables. The unit root test results reveal that all variables are integrated of order one, justifying the use of the ARDL bounds testing approach. The empirical findings indicate that gross savings has a positive and significant effect on RGDP in both the short and long run, underscoring the importance of domestic financial mobilization for sustainable growth. Conversely, FDI exerts a negative influence on RGDP, suggesting inefficiencies in its application. Population contributes positively in the short run, while interest rate effects are mixed. The error correction term confirms a stable long-run relationship. Based on the findings, the study recommends strengthening savings mobilization, improving FDI quality, and promoting inclusive financial policies. Further research should explore micro-level data and incorporate variables such as financial literacy and digital inclusion.