Foreign Aid, Domestic Savings and Investment:
Implications for Nigeria

Okore Amah Okore; PhD; Anthony Odinakachukwu Nwadiubu; PhD

doi:https://doi.org/10.56201/jafm.v8.no5.2022.pg45.53

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Foreign Aid, Domestic Savings and Investment: Implications for Nigeria

Okore Amah Okore, PhD, Anthony Odinakachukwu Nwadiubu, PhD

Abstract

The study examined the implications of foreign aid on domestic savings and investments in Nigeria. The scope of the study covered a period from 1987 to 2019. The hypotheses were tested using the E-view statistical software adopting the Ordinary Least Square (OLS) method on the regression models adopted. The signs and significance of the regression coefficients and the probability were relied upon in explaining the nature and influence of the independent variable on the dependent variable as to determine both magnitude and direction of impact. In the analysis we relied on the following statistical tools; Correlation Coefficient (R), Coefficient of Determination (R2), probability and the student (t) test. The hypotheses were tested at 0.05 (5%) level of significance. Results of the findings revealed that: Foreign aid had positive and significant impact on Gross Domestic Product (GDP), Foreign aid had positive and significant impact on domestic savings and Foreign aid had positive and significant impact on domestic investment in Nigeria within the period under review. The study concluded that, the contribution of foreign aid to growth can be magnified if Nigeria focuses on implementing effective macroeconomic policies. It is therefore recommended that, policies that strengthen the state and its institutions such as institutional development, human capital development, investment targeting, diversification of the Nigerian economy, a stable and trust worthy political environment, monitoring and evaluation on the use of aid funds and other aid-friendly domestic policies should be promoted.

Keywords

ImplicationsForeign AidDomestic SavingsInvestmentNigeria

References

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Foreign Aid, Domestic Savings and Investment: Implications for Nigeria

Abstract

Keywords

References

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