Foreign Aids and Sustainable Growth in Africa: Evidence from Nigeria

Abstract

This study analyzes the foreign aids and sustainable growth in Africa using Nigeria as a point of reference. The study employs annual data sourced from the World Development Indicators (WDI) 2017 spanning from 1970 to 2017 in determining the effects of foreign aid on sustainable growth in Africa while adopting quantile regression model after testing for the stationarity tests using both the Augmented Dickey-Fuller (ADF) and Phillips–Perron (PP) tests. The estimation result from the quantile regression shows that external debt (EXD) and official development assistance (ODA) have a negative and statistically significant effect of sustainable growth in Africa. Foreign direct investment (FDI) also has a positive influence on sustainable growth but with a significant insufficient result. Equally, the estimation result only shows that technical cooperation grants (TCG) are the only variable with a positive influence and statistically significant result on sustainable growth in Africa. Based on these findings, African leaders should put more efforts in proper utilization of the technical cooperation grant to further engender growth and its sustainability in the economies of Africa.