Official Development Assistance and Poverty Alleviation in Nigeria: An Error Correction Model Approach

Aderemi Timothy Ayomitunde ., Yusuf Modupe Ololade ., Sodeinde Gbemi Moses ., Aleshinloye Ibrahim Babatunde .

Abstract


This study is examined the relationship between official development assistance and poverty alleviation in Nigeria which majority of studies in the past have failed to explore. Consequently, the study utilized an error correction model to address its objective. The major findings in this study are as follows. There is a significant negative relationship between official development assistance and household consumption per capita in Nigeria. This implies that official development assistance has no capacity to alleviate the current worrisome level of poverty in this country. However, FDI contributes to poverty alleviation in Nigeria though not significant. Furthermore, 11% of the error caused by shock was corrected annually in the model.  The study therefore makes these recommendations for the policy makers; whenever alleviation of poverty is the target of the policy makers in the country, the Nigerian government should be committed to the provision of conducive investment environment that can facilitate further inflows of FDI from the developed countries, especially G 7 and G 13 countries. Also, the policy makers in Nigeria should not compromise in tailoring official development assistance towards projects and programs that have trickle down effects on the masses in Nigeria.


Keywords


ODA; Household Consumption Per Capita: Poverty Alleviation and ECM

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