Analyzing the Efficacy of Non-Oil Revenue Mobilization Strategies in Reducing Income Inequality and Poverty in Nigeria

Abstract

This study investigated the efficacy of non-oil revenue mobilization strategies in reducing income inequality and poverty in Nigeria. The primary aim was to examine how fiscal policies, particularly those related to non-oil revenue, can contribute to sustainable poverty reduction and a more equitable distribution of income. The study adopted an ex-post facto research design, analyzing secondary data from 1981 to 2024. Using econometric techniques such as the Augmented Dickey-Fuller (ADF) test, co-integration analysis, and the Error Correction Model (ECM), the study assessed the long-term relationships between key economic variables, including government expenditure, oil and non-oil revenues, and poverty headcount. The theoretical framework incorporated Fiscal Redistribution Theory, Resource Curse Theory, and the Peacock-Wiseman Hypothesis to guide the analysis. The findings revealed a significant positive impact of non-oil revenue on GDP growth, but also highlighted challenges such as the diminishing role of oil revenue and inefficiencies in government spending. The study concluded that effective non-oil revenue mobilization can reduce poverty and inequality, provided there is improved governance, efficient public spending, and economic diversification. Therefore, the study recommended that Nigeria focus on diversifying revenue sources, enhancing the efficiency of public expenditure, managing inflation, and improving governance to ensure that fiscal policies have a meaningful impact on poverty alleviation.