ABSTRACT
There has been a steady
increase in poverty, starvation, and hunger across Africa as a result of the
continent's inherent level of underdevelopment, which has also contributed to
the spread of terrorism, political instability, and separatist agendas across
the continent and the takeover of Nigeria's and Ghana's political landscapes by
extremist groups. Despite its enormous international and domestic debt ceiling,
the government faces a variety of pressures to address these problems by
increasing public spending. Nigeria and Ghana's governments have renewed
optimism of expanding public expenditure via foreign help to this goal. Based
on this premise, the
study empirically investigates the impact of foreign aid on public expenditure
in Nigeria and Ghana from 1981 through 2021. The Study objectively at;
establishing the link between; foreign official development assistance (ODA);
foreign grant; foreign technical cooperation and public expenditure in both
economies over the study scope. The study implored
structural unit root, ARDL bound test, ARDL error correction model and auto
regressive distributive lag model (ARDL) to regress public expenditure growth
(LOGPUBEXGR) for Nigeria and Ghana against foreign official development
assistance (LOGFODA), foreign multilateral aids (LOGMFAID), foreign grant
(LOGFGRANT) and exchange rate (LOGEXR). The result of empirical examination
proved that; increasing the
coefficient of exchange rate in Ghana for the period would translate to 175.92%
increase in public expenditure growth. In Nigeria, exchange rate likewise
showcased a positive additive relationship with public expenditure growth, thus
a one percent increase in exchange rate in Nigeria would transmit to 82.75%
rise in public expenditure growth in Nigeria. Furthermore, increasing
foreign grant for this period in Ghana would transmit a decline of 4.30% in public
expenditure growth at a significant rate of 0.006%. in Nigeria. Foreign grant
indices indicated a negative influence over the Nigerian economy for the study
scope, thus increasing foreign grant in the country for the study duration is
expected to transmit 3.72% decline in the values of public expenditure growth
tendencies in the country. The study therefore recommends that; government of
Nigeria and Ghana should carryout proper review of grants conditions to making
sure, it aligns with the corporate developmental goal of the economy over time.
Government should review the conditions on the basis of – grant performance
requirements; cashback provisions and monitoring, while also favoring National
sovereignty over neocolonialism. The study concludes that, while foreign aids
in all form has an additive value to government bulk expenditure in Nigeria and
Ghana, technical aids has more impactful dimension on long run growth of
government expenditure in both countries.
NKEM, N (2024). Impact of Foreign Aid on Public Expenditure: A Comparative Study:- Nkem, Ogechukwu M.. Repository.mouau.edu.ng: Retrieved Nov 13, 2024, from https://repository.mouau.edu.ng/work/view/impact-of-foreign-aid-on-public-expenditure-a-comparative-study-nkem-ogechukwu-m-7-2
NKEM, NKEM. "Impact of Foreign Aid on Public Expenditure: A Comparative Study:- Nkem, Ogechukwu M." Repository.mouau.edu.ng. Repository.mouau.edu.ng, 25 Apr. 2024, https://repository.mouau.edu.ng/work/view/impact-of-foreign-aid-on-public-expenditure-a-comparative-study-nkem-ogechukwu-m-7-2. Accessed 13 Nov. 2024.
NKEM, NKEM. "Impact of Foreign Aid on Public Expenditure: A Comparative Study:- Nkem, Ogechukwu M.". Repository.mouau.edu.ng, Repository.mouau.edu.ng, 25 Apr. 2024. Web. 13 Nov. 2024. < https://repository.mouau.edu.ng/work/view/impact-of-foreign-aid-on-public-expenditure-a-comparative-study-nkem-ogechukwu-m-7-2 >.
NKEM, NKEM. "Impact of Foreign Aid on Public Expenditure: A Comparative Study:- Nkem, Ogechukwu M." Repository.mouau.edu.ng (2024). Accessed 13 Nov. 2024. https://repository.mouau.edu.ng/work/view/impact-of-foreign-aid-on-public-expenditure-a-comparative-study-nkem-ogechukwu-m-7-2