Africa as a continent suffered a great deal during the colonial
era. This included the immeasurable loss in growth and development both
economically and politically. For the sake of survival, the continent had no
choice but to turn back to the West and depend on foreign assistance in other
to grow and develop. The raw materials and natural resources in this region had
already been exploited without consideration for the Africans. Nigeria, being
part of Sub Saharan Africa, located in the Western region was not an exception.
After most countries had gained independence, the colonial masters introduced a
new concept called “Development politics” for the ex-colonies in order to
maintain their ties and secure control of the resources, economy and politics
in this region. Development politics then evolved into development aid (foreign
aid) which was a mechanism designed to provide help to develop the new states.
The European Development
Bank was then created by the European Community (E.C.) to fund the former
colonies for their development as newly independent states. According to the E.C.
Agreement, development politics was aimed at promoting sustainable economic and
social development as well as foster democracy and rule of law to the
underdeveloped countries (Monar, 2000:119). With development aid, the E.C.
hoped to put a stop to the spread of communism by the Eastern bloc to the new,
was usually provided to nations that survived long lasting or lengthy periods
of conflicts and desperately required peace building missions and activities.
Aid also served as a means of promoting electoral processes or to strengthen
new political formation and civil societies along with providing assistance in
a nation where there was insecurity or threat to security.
aid is a post war occurrence which was initially a means of narrowing the gap
between under developed nations and industrially advanced nations. It was also
regarded as a major weapon for winning the Cold War. It served as an economic
development strategy influenced by developed economies during the late 1940s,
following the success of the Marshal Plans (Emma, 2005)
Official Development Assistance (ODA) was the chief regulator of aid to countries
before the establishment of Bretton Woods institutions such as the IMF, World
Bank and such assisted in granting loans and aid to countries facing serious
economic crisis and needed urgent help for escape. As of 2014, the net official
development assistance and official aid received in Nigeria was $2,436,950,000.
role of foreign aid in the overall development of a nation has held opposing
views in past years. The ultimate goal of foreign aid is to put an end to
extreme world poverty and increase the level of development in Less Developed
Countries (LDC). Various studies, however, hold different opinions. Whereas,
Addison, Mavrotas and McGillivray (2005) are in support of the positive impact
of foreign aid on the growth and development of a nation, Abegaz (2005) has
substantial evidence of the negative impact of foreign aid on growth and
development of a nation. With an indifferent view and stand, the African
Development Bank (AfDB) is of the opinion that aid has no impact whatsoever on
growth and development in a nation.
countries like Nigeria are recognized for their inability to fully maximize
their resources and as such, depend on the assistance of developed countries for
their growth and development. These countries are also largely associated with
high rate of poverty, low level of income, high level of unemployment and the
likes. Foreign aid could therefore be considered as a reasonable option for
supplementing the savings-investment gap that is witnessed in the country. Nigeria has been a major beneficiary of foreign aid ever
since her independence in 1960.
Nigeria is rated as Africa’s largest economy and the 21st
largest economy in the world by the International Monetary Fund IMF (2016).
In addition to this, Nigeria that was once among
the 50 richest countries in the world in the 1970’s has been demoted to now
belong to the class of the 25 poorest countries in the world. What is indeed
ironic is that Nigeria, who is the sixth largest producer of oil also holds the
title of being the host to the third largest number of poor people in the world
aside China and India (Igbuzor, 2006:140)
Although Nigeria is still benefitting from foreign aid and all
sorts of foreign assistance in different aspects of her economy which includes
receiving almost the same amount as in the early 1980s, socio-economic
development has remained dismal (Fasanya
& Onakoya, 2012).