AN ASSESSMENT OF THE IMPACT OF FOREIGN AID ON POVERTY REDUCTION IN NIGERIA; 1999 – 2021

Abstract

The study examined the link between foreign aid and poverty reduction in Nigeria, 1999-2021. Qualitative method of data collection based on documentary evidence was used. Secondary and primary sources of data were collected. The primary data was via unstructured key informant interview of political office holders and political analysts. Qualitative descriptive method based on content analysis was used as our method of analysis. The work is predicated on dependency theory. The study found that foreign aid and technical assistance has a reversal effect on socio-economic development in Nigeria. Specifically, foreign aid has not helped to eliminate poverty nor increase sustainable development in Nigeria over the years. Rather, aid had hampered growth and development, increase dependency status of Nigeria on the West, and increase the poverty rate in Nigeria. This study also observed that when countries seek foreign aid as a means of generating revenue for their budget, it has unintended consequences of breeding corruption and embezzlement of public funds. Furthermore, the conditionality’s (purchasing of items, devaluation of Naira, trade liberalization, SAP) attached to aids are detrimental to a developing economy like Nigeria. Aid is a quid pro quo affair. On the basis of our findings, we recommended amongst other things that government should establish economic plan which reduces Nigeria’s reliance and dependence on aid year on year, the government should strengthen Nigerian institutions for accountability, transparency, rule of law and good governance. Nigeria should be free from Western aids, the government should seek for green field investors to come and set up industries in the country. Nigeria should encourage Foreign Direct Investment. This will be achieved by evolving policies that will be developmentally oriented in Nigeria.