Effect of Foreign Aid on Employment Generation in Nigeria
CHAPTER ONE
Objective of the study
The objectives of the study are;
- To ascertain the relationship between foreign aid and employment generation
- To ascertain the relationship between foreign aid and poverty reduction
- To ascertain the relationship between foreign aid and Nigeria economy
CHAPTER TWO
LITERATURE REVIEW
Concept of Foreign Aids
Easterly (2006) defines foreign aid as a voluntary transfer of resources from one country to another with the objective of benefiting the recipient country. Aid has been defined to Ajayi (2000) as a form of assistance by a government or financial institutions to other needy countries, which could be in cash or kind. It should be noted that aid tends to have several functions, such as being a signal of diplomatic approval, tool for strengthening a military ally or to reward a government for behaviour desired by the donor. It can also be for provision of infrastructure needed by the donor for resources extraction from the recipient country or may be as a way of gaining other kinds of commercial access. Riddell (2007) also defined foreign aid as comprising all kinds of resources ranging from physical merchandise, skills and technical know-how, financial grants including gifts and loan which are given to recipients by donors at concessional rates. The Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD) also defines aid as Official Development Assistance (ODA) which qualifies on three criteria. It is to be undertaken by official agencies; it is to have the main objectives of promoting economic development and welfare and it has to have a grant element of twenty five percent or more. Aid according to Ajayi (2000) is a form of assistance by a government or financial institution to other needy countries, which could be in cash or kind. Foreign Aid, according to Todaro and Smith (2010) is the international transfer of public funds in the form of loans or grants either directly from one government to another (bilateral assistance) or indirectly through the vehicle of a multilateral assistant agency such as World bank. Economists have defined foreign aid, therefore, as any capital flow to a developing country that meet two criteria; its objectives should be noncommercial from the point of view of the donor and it should be characterized by non- concessional terms; that is, the interest rate and repayment period for borrowed capital should be softer (less stringent) than commercial terms. Freeing aid in its broadest sense has been defined as consisting of all resources- physical goods, skills and technical know-how, financial grants (gifts), or loans (at concessional rates) and support in international negotiations transferred by donors to recipients.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine a effect of foreign aid on employment generation in Nigeria. CBN, Abuja, Nigeria forms the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain effect of foreign aid on employment generation in Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of effect of foreign aid on employment generation in Nigeria.
Summary
This study was on effect of foreign aid on employment generation in Nigeria. Three objectives were raised which included; To ascertain the relationship between foreign aid and employment generation, to ascertain the relationship between foreign aid and poverty reduction and to ascertain the relationship between foreign aid and Nigeria economy. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from selected Nigerians CBN. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
Based on the empirical analyses and results obtained in this study, foreign aid has been found to have a positive relationship with GDP growth rate and as such the null hypothesis is rejected while poverty and unemployment rates have inverse relationship with GDP growth rate which implies that foreign aid has not been effectively used and managed as it ought to due to diversion, misappropriation and embezzlement of funds. If foreign aid inflows are not properly monitored and effectively utilized, unemployment will be on the increase and poverty level will rise. But rather, government and indigenous investors in Nigeria should focus on economic diversification that will possibly send exploitative donors’ invasion to oblivion or reduce to the barest minimum over-reliance on foreign aids for national development.
Recommendation
The government of Nigeria should ensure that policies are made to build and strengthen institutions so that aids given by donor agencies to stem down poverty and unemployment are not diverted or siphoned for personal aggrandizement.
Foreign aids, when attracted, should be channelled to revenue generation projects that will increase the level of economic capital base and employment that assure steady economic growth and poverty reduction.
The government should block sources of economic leakages and illegal money transfers to foreign countries through its ministries and agencies that weaken our economy and thus makes the country vulnerable to foreign aid.
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