Recent achievements of robust economic growth accompanied by increasing rates of unemployment present an uncharted paradigm in the history of the Nigerian economy. Despite economic growth averaging 7 percent during 2004-2012, unemployment rose from 13.4 percent to 27.4 percent. In particular, youth unemployment rose from 29 percent to over 40 percent.

The experience becomes more paradoxical when the drivers of recent growth are brought under consideration. Over the period, non-oil sectors that are considered natural job creators – agriculture, commerce and distribution, and communications sectors – account for more than 80 percent of economic growth. While the increasing unemployment rate is in part due to expansion of the labor force due to influx of new entrants, it is more significantly a result of failure of economic growth to create substantial employment. At other times, especially during the financial crisis, economic growth was accompanied by net job destruction.

This paradox puts a dent to credibility of the “growth will create labour demand” hypothesis that has been the key doctrine of the Bretton Woods institution for decades, and has led to suggestions for rethinking labor market strategies. Realization of the need for growth to create employment and reduce poverty had given birth to the increasingly popular qualification of economic growth in terms of “inclusiveness” and “pro-poorness” in development circles. Indeed, there is a renewed emphasis on promoting growth in sectors with high rates of labor absorption, with the idea that expansion of those sectors will result in increased demand for labour, and as a consequence, increased employment rates.

The link between poverty reduction and growth has for some time been the focus of numerous empirical studies on growth. Recent studies show that the responsiveness of poverty to economic growth varies significantly both within and between countries and that growth alone is not sufficient for poverty reduction. For example, Klasen and Misselhorn (2008) found that a one-percent increase in economic growth will cause headcount poverty to reduce by 16.7 percent in Slovakia, 6.5 percent in Latvia, 2.1 percent in Brazil, 0.54 percent in Zambia and in China, 2.8 percent in the urban sector and 1.44 percent in the rural sector.  There is a renewed effort to understand the intervening factors between poverty and growth given the recent strong growth witnessed in several countries. This effort is particularly more pronounced in sub-Saharan Africa where growth and poverty have almost kept pace with each other.

This paper examines the bilateral trade relationship between Nigeria andPoland for the period 1995 to 2012. It uses the Decision Support Model (DSM)and the Growth Identification and Facilitation Framework (GIFF) to identifymarket for Nigerian exports in Poland.