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ABSTRACT
This research study has analyzed the effects of foreign aid in promoting economic development in Nigeria. The study used available data in Nigeria from 1995-2020. The study adopted the ARDL model for investigating the short and long time relationship between foreign aid and Gross Domestic Product Per Capita (GDPPC). The hypothesis of foreign aid having an effect on economic development was explored and examined. This study sought to achieve the following objectives: To establish if foreign aid translates to economic development and to determine if there is a relationship between foreign aid and economic development in Nigeria This study also analyzed the determinant of economic development in Nigeria over the same period. The results clearly showed a positive relationship between foreign aid and Zambia’s economic growth in the periods that were examined. The findings in this study affirm that foreign aid may be important in promoting economic development. This study also asserts that foreign aid may be effective in improving the quality and lives of people if used effectively. Thus, the outcome of this study recommends that foreign aid be directed towards the promotion of investment because its proper use can promote and boost the country’s economic growth and most importantly development. For policy implications, this study also found that independent variables such as Net Bilateral Aid, Labor Force Participation, Gross Fixed Capital Formation, and Human Development Index as important determinants of economic development in Nigeria over the same period (1995-2020).
