FOREIGN AID INFLOWS AND ECONOMIC GROWTH IN ECOWAS SUB-REGION
FOREIGN AID INFLOWS AND ECONOMIC GROWTH IN ECOWAS SUB-REGION

Summary/Abstract: There exist mixed studies on the effect foreign aid inflow has on economic growth. There also exist scanty studies that employed the entire countries (15) of ECOWAS sub-region in the investigation of the impact foreign aid inflows has on economic growth in the sub region. In the light of the continuous increase in foreign aid inflows to ECOWAS sub region, the impact this inflow has on the economy of the sub-region was examined for the period 2005 to 2017. Furtherance to the study objectives, diagnostic tests were carried out. Stationarity test revealed that the variables were non-stationary at level; but attained stationarity at first difference. With the exception of panel ADF statistic, Pedroni's and Kao panel cointegration tests revealed that the null hypothesis of no cointegration should be rejected. Generalized Method of Moment estimation result revealed that foreign aid inflows exerted a positive but insignificant impact on economic growth in ECOWAS sub-region. The over-identifying restrictions test revealed that the instrument of measurement used in the model was valid. It was recommended among others that policy makers should ensure that aid inflows are employed productively.

• Details
• Contents