Foreign aid-Economic Growth Nexus in Africa: Does Financial Development Matter?

dc.contributor.authorAppiah-Otoo, I.
dc.contributor.authorAppiah, I.K.
dc.contributor.authorAcheampong, A.O.
dc.contributor.authoret al.
dc.date.accessioned2024-05-27T11:29:08Z
dc.date.available2024-05-27T11:29:08Z
dc.date.issued2022
dc.descriptionResearch Articleen_US
dc.description.abstractThis study explored the role of financial development in foreign aid (measured by agriculture, humanitarian, health, economic infrastructure and services, and education aid) and economic growth relationships for 37 African countries spanning the 2002–2018 period. Using the instrumental variable generalized method of moments model, our findings indicated that while foreign aid impedes Africa’s growth, financial development spurs economic growth. The conditional effect analysis showed that financial development conditions foreign aid to spur economic growth. The country-specific analysis further showed that foreign aid has a higher growth elasticity in countries with relatively better financial systems, such as Mauritius, South Africa, Gabon, Tunisia, and Botswana, whilst the growth elasticity of aid is smaller in countries with a relatively weak financial system, such as Malawi, Guinea-Bissau, Sierra Leone, and the Democratic Republic of Congo. The study recommended the need for for policymakers in Africa to implement innovative ways to improve domestic revenue mobilization. The study also recommended that policymakers in Africa should create an enabling environment that will enhance the development of Africa’s financial system to mitigate the adverse effect of aid on economic growth.en_US
dc.identifier.otherhttps://doi.org/10.1080/10168737.2022.2083653
dc.identifier.urihttp://ugspace.ug.edu.gh:8080/handle/123456789/41999
dc.language.isoenen_US
dc.publisherInternational Economic Journalen_US
dc.subjectForeign aiden_US
dc.subjectAfricaen_US
dc.subjecteconomic growthen_US
dc.titleForeign aid-Economic Growth Nexus in Africa: Does Financial Development Matter?en_US
dc.typeArticleen_US

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