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Impact of foreign aids on poverty alleviation in Nigeria

Author Affiliations

  • 1Department of Business Economics, Wageningen University and Research, Netherlands
  • 2General Studies Department, The Federal Polytechnic, Ilaro, Nigeria

Int. Res. J. Social Sci., Volume 9, Issue (2), Pages 1-7, April,14 (2020)

Abstract

The aim of this study is to examine the impact of foreign aid on poverty alleviation in Nigeria over the period of 1990 to 2017. Data were collected from UNCTAD World Bank database and CBN Statistical Bulletin. Consequently, Cointegration, DOLS and Granger Causality approach was utilized to address the objective of this study. The major findings in this study are summarized as follows. Foreign aid has not led to poverty alleviation in Nigeria. Similarly, FDI has a negative impact on household consumption per capita but not significant at 10% level of significance. This implies that FDI does not reduce poverty in Nigeria. In addition, there is an existence of an insignificant positive relationship between inflation rate and household consumption per capita in Nigeria. Furthermore, there is a unidirectional causality which runs from foreign aid to household consumption per capita. However, there is no feedback relationship between foreign aid and FDI, likewise FDI and household consumption per capita. Also, there is a unidirectional causal relationship flowing from inflation rate to household consumption per capita. Finally, due to these in this study, the following recommendations can be since foreign aid did not lead to poverty alleviation in Nigeria, the policy makers in Nigeria should not depend on foreign aid as only means of combating poverty in Nigeria. Therefore, the policy makers should use a holistic approach to tackle poverty in the country.

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