Time-series analysis reveals negative impacts of foreign aid on economic growth in Nigeria, highlighting the need to prioritize domestic capital formation.
Key Points
Official development assistance from 1980 to 2019 retards Nigerian economic growth rather than promoting it, while domestic labor force expansion supports progress.
ARDL bounds testing approach to cointegration establishes a long-run relationship among variables, whereas the Granger causality test shows no causal link to growth.
Highlights the necessity of fostering credit extensions to small enterprises to boost gross capital formation, though the analysis is constrained by data up to 2019.