Impact of Overseas Development Assistance on Economic Growth in Nigeria (1981-2021)

Abstract

Nigeria currently has the largest economy in Africa with a GDP of $477.38 billion (Michael, 2023). However, the country’s great fortune, which is majorly driven by petroleum exports, has not successfully translated into a sustained economic development, as the nation continues to endure widespread poverty and income inequality for decades due to many contributing factors, including rapid population growth, low standard of education, and corruption. Consequently, Nigeria has looked to Overseas Development Assistance (ODA) as one of many means to address its economic problems, and this ODA phenomenon has raised debates among scholars with regards to its positive or negative impact, and the significance of such impact on the Nigerian Economy. This study investigated the amount of ODA received by Nigeria for the period 1981-2021, and the changes that such assistance has effected on the GDP of the nation. The study examined the empirical research by other scholars, for the same study, under a spectrum of economic, geographic and political climates. The Auto Regressive Distributed Lag (ARDL) Bounds Cointegration Test and the Granger Causality test were adopted for this study, and the results revealed that ODA impacted Nigeria’s GDP significantly and positively in the period of study. This study therefore recommends that the Federal Government of Nigeria, as well as other stakeholders, should pursue and maintain more favourable relationships with the international multilateral and bilateral donors, in order to boost economic growth in Nigeria.