Impact of Foreign Aid on Nigeria Socio-Economic Development

 Impact Of Foreign Aid On Nigeria Socio-Economic Development

A lot of works have been done on the topic “impact of foreign Aid on Nigeria socio-economic development. The review of these works therefore focus on the contributions and relevance of some materials such as newspaper; journals, magazines relevant books on international relations and internet browsing. Meanwhile crisis, low standard of living, low Agricultural productivity etc in Africa has attracted various minds of foreign aid to her socio-economic development.

Clover R. W (1966:74) Observed that “the increasing complexities in the relationship of African societies have made a bold attempt towards the achievement of Africa place a mirage. This assertion stems from the realities that African Nations just like individuals are selfish especially in the pursuit of their national interest.
According to Oganski A.F.K (1958), he says that in the pursuit of National interest nations “use power”. He further asserted that it is   in the pursuit of interests that conflicts emanate.
NEPAD as many observed is a nascent platform design to pull the continent out of socio-economic miasma. But the head of NEPAD team in Nigeria, Iseac A. Olokun, is disturbed by the observation that the core issues of NEPAD is said to be poverty eradication and wealth creation are being confirmed to the back burned ; that indeed, conferences and workshops are being held without these issues taking the centre stage, sometimes not even mentioned.
Iseac A. Olokun in his interview on how he intended overcoming the problem of finance with respect to NEPAD. In his words; “you know, we have been talking about and 64 billion worth of investment every year. No, this is not all about it. There are millennium development goals. There are goals universal accepted by the international fera in the past two years since the year 2000 to set a vision for the world to help people that are falling behind like in Africa”. The millennium development goals says that by year 2005, all developing countries especially Africa must try and reduce the number of people caught in poverty (living under one dollar per day). They must try and reduce them by 50%, not really to eradicate them. What NEPAD has done and supported by international financial institutions is simply to say, what does this translate? So, for the expert, this would mean that Africa will need to grow on the average at 7% per annum on a sustained basis between now and year 2015.
Iseac A. O further observed that to get 7% per annum what do we do? The experts advised the investment of 33 percent of our Gross Domestic Product (GDP) to enable us to meet the set target. So NEPAD says, let’s be optimistic let’s say eight out of that 18% comes in as foreign aid and even through, it’s not up to 8.
Oghogho O.U. (2002) says “I tell you first, if we imbibe good economic governance; if we learn respect this iron low of macro-economics and manage our economy well, we will be able to get a lot more resource. Now we have to be able to ensure that we save more. That’s the secret in all societies that have developed. We cannot be saving 10% or 15% of our GDP and say we are going to move like China” meanwhile, deducing from his assertion, government has to begin sustained campaign to make people realize the importance saving. Save more, that is the only secret to be able to invest more because we are talking about wealth; the secret to long term capital so that businessmen can raise long-term capital and go and turn that bush into factory.
Momoh E.O. (2001) says “even here in Nigeria, we don’t have bond capital. The state government are just trying to borrow to revive the bond market. Bond market is part of the secret of development”. NEPAD is saying, African nations must come in unison and ensure that they develop a mature financial and capital market. And I am saying in addition to that, that there must be capital repatriation. Te negotiation that former president Olusegun Obasanjo has had with the Abacha family to bring home these billions of dollar is part of it.
The World Bank president Mr. Paul Woffowitz has recently challenged the international community to deliver on its promises of five years ago to help the world’s developing countries halve poverty and deliver real improvements in the lives of their poorest people by 2015.
Wolfowitz call was made during the recently concluded United Nations summit in New York, which was the largest gathering of world’s leaders in history and attended by more than one hundred and seventy heads of government, and making the both anniversary of the founding of the United Nation. The World Bank president pleaded with the world leaders who attended the United Nations meeting to assist the world poorest countries especially in sub-Saharan Africa-which would not meet the millennium Development Goals to fight hunger, poverty and disease (Daily independent September 23, 2005:14)
Olisa et al (2002:242) observed that “despite Nigeria’s gestures of prominence, democracy, love and peace, it has internally had one of the highest incidences of political instability, civil war, inflation, strikes, religious crisis and into clearance, violence, famine as result of her relationship with international bodies.
The successive United Nation Development Programme (UNDP) Report on Human Development (HDR) since 2003 have consistently shown that Nigeria is paradoxically one of the poorest nations in the world in spite of its abundant natural and human resources (see Njoku, 2005:121-141; Okafor: 2004 and Oni 205:9). This paradox in the nation’s economic and social life poses a problem to Nigeria’s foreign posture. It is in view of this unacceptable situation in the country’s socio-economic life that the present administration embarked on economic reform to launch the country on the part of sustainable economic growth and social development.
Nwoji (2003:18) observes “The underlying philosophy of NEPAD is that Africa will champion its own development and will no longer beggarly approach the super-powers for a paradigm and resources for development. Rather, Africa in the spirit of mobilize most of the funds within to further its development”
Africa and other developing states were not divinely or originally underdeveloped underdevelopment came at a particular historical epoch when external factors interfered with existing economic of these states thus; distorting and disarticulating them such that they are highly dependent on external economies. Even the euphoria of political independence among the underdeveloped states has worsened dependence and economic backwardness rather them fundamentally or structurally change the status quo.
Gena J. of Ahmadu Bello University described the Agricultural Development Project Scheme (ADPS) as “world bank direct and not World Bank Assisted” when he sees World Bank Project Evaluation State as the fact that World Bank is in control of who gets what, how and when.
Infact, the popular understanding in Nigeria is that the World Bank as one of the foreign aid agencies dictates rather than negotiate with the government. Although, this is not tried to show, the behaviour of environment functionaries who are associated with the project reinforce this belief. For instance, when a particular community in Ilorin did not like the manner in which one of the ADPS was being implemented specially in matters relating to the sitting of the projects headquarters, they were forced by the Nigerian environment’s headquarters in Washington DC to protest. As Dunmoye (1986) noted, the Nigeria government gave the impression that the Bank had the final say on the matter. When there was a disagreement at the environmental level on the state-wide Agricultural Development Project (ADP) in Kaduna State, the state government protested that rather than Surrender to the Bank, it would withdraw from the project (New Nigerian November 20, 1980).
Nigeria and Japan on Monday 11October, 2006 in Abuja signed an agreement for N710 million Japanese grant meant to support and enhance the quality and quality of water supply in Oyo State as well as improve sanitation.
Chief Economic  Adviser to former president Obasanjo and Deputy Chairman of the national planning commission, Dr. Magnus Kpakol said at the signing ceremony that owing to the envisioned increased in the current low water supply rate in its rural areas from 4.28% to about 17.5% by 2006 through the planned construction of borehole facilities Oyo State through the federal government has approached the government of Japan for assistance in actualizing this dream. In response to this request, Kpakol said, the government Japan through the Japan international co-operation agency (JICA) had sent study terms to conduct a “Basis Design study on rural water supply and sanitation in Oyo State.
Kpakol commended Japan for its assistance and expressed optimism that with the execution of project, the water supply rate in the rural areas of Oyo State would increase from 4.28% to 5.31%.
“Currently, an estimated 150,000 persons from 600 communities are receiving safe water from state water supply and sanitation agency. The immediate effect would be gradual decline in the infestation rate of guinea  worm, which is an endemic problem in the state said Kpakol.
Dr. Bamanga Truker, chairman Business Group of NEPAD. Observed that NEPAD success lies more on the inter-state trading between African countries. He noted further that Africa will effectively attract foreign partners to the continent and even NEPAD through inter-State trading. Bamanga said “we have enough opportunities and businesses within the continent. But we tend to look further. Even within these countries, we can develop ourselves through this trade and also reduce the cost of doing business. As a matter of fact we need trade more than foreign direct investment”. Dr. Bamanga in his interview is only canvassing for the creation of an enabling environment for such inter-state trading to thrive.
On April 20, 2004, German government pledged support for the New partnership for African Development (NEPAD), while the extent of the support was not spelt out. The German leader, President Johannes Rau hinted that Berlin was designing and fin-turning, when necessary, polices aimed at realizing the goals agreed at the United Nations. Millennium summit of September 2000 and would endeavour to meet the continent project halfway on such crucial issues as human rights and good governance, strengthening the rule of law, Democracy and Civil society, food security and fight prevention, peaceful conflict resolution and post conflict rehabilitation, activities to help groups threatened with economic and technologies marginalization and fight against Hiv/Aids. He made a case for a purposeful mobilization of the continent strength and capabilities of only to send a powerful message to those who, at present remain unconvinced that the dream of a buoyant, modern Africa would ever come true.
In his address, “charting Africa’s path into the 21st century-Reflections from German perspectives”-delivered in Dares Salaam, Tanzania, at the invitation of the Mwalimu Nyerere foundation, Rev. said Berlin would continue its utmost to ensure that people in Africa could live in peace, prosperity and dignity. Africa, in his words “is no longer the forgotten continent. A politically stable and economically prosperous Africa is also our own interest… creating an environment that offers security growing prosperity and fair give-and-take between all sections of society is the best way to prevent the spread of instability and terror”. The German leader said that Europe and the Organization of Economic Co-operation and Development (OECD) countries needed to do more than in the past to open up their markets, especially to Africa’s agricultural products and they needed to eliminate their own agricultural subsidies. Free access to the market of OECD countries in Rau’s evaluation, would mean for the developing countries an estimated $100 billion in additional revenues. “To grasp the true significance of this”, he offered that “we need recall that the annual sum currently spent on development aid around the world is about $50 billion. The heated debate over whether Africa stands to remains lost from globalization Agricultural Products from the continent are denied fair access to OECD markets. The countries of Africa deserve more than a future as commodity suppliers”
Besides, Olukukun (2004) observed that in a recent meaning with parliamentarians of the Economic Community of West African States (ECOWAS) that with the process of integration going at the continental level, African States had shown desires to be responsible for their own future.
These are the above modalities observed by different writers that will be of a help to the development of Nigeria socio-economic particularly eradicating poverty and hardship in the faces of the citizens of Nigeria.
In the theoretical framework of this research it will be anchored on a synthesis of the modified dependency theory and social order theory of negotiation propounded by Anselm Strauss (1979)
The corrupt of “dependency” was coined by a Brazillian sociologist, Fernando Hanrique Cardoso. However,, A.G frank is often credited with formulating the original version of the “Dependency theory”. His book titled; capitalism and underdevelopment in Latin America, written in the early 1960s and published in English in 1976 can be taken to be the opening salvo in the debate over dependency theory. Frank presented this theory as his contribution to development economies and wanted it to be seen along side neo-classical theories viz structurist theories and traditional Marxist theories all of which he sees as competitors for the explanation of the present condition of the less developed countries. He used the concept of dependency to categories relation of power and control such that the course of development in the underdeveloped nations or satellite is determined by that of the developed nations or metropole. The consequences of these relationships for the problems such as poverty and accelerated and the steatite is further disadvantaged (Frank 1986).
Johan Galtung (1970) has informed on A.G Fank’s effort. In a journal article titled “structural theory of imperialism” he argued that the world consists of “centre” nations and “periphery” nations. According to him, there is a harmony of interest between —— states, especially the centre of the centre and the centre of the periphery. Also a disharmony of interest exists between centre of the periphery and periphery.
This theory is useful for our understanding of the process of negotiation between Nigeria and the international aid agencies and its mentors on the one hand and an underdeveloped state such as Nigeria on the other hand. While international aid agencies belongs, Nigeria falls within the centre of the periphery. Instructively, international aid agencies do not operate on the principle of the country one vote, but according to the axiom, “the richer the country and the greater its stock in the bank the greater its weight the decision making process” five countries and agency namely the United States, Great Britain, West Germany, France and Japan with United States having by far the largest stock and voice.
Not surprising IMF and the World Bank have not hesitate to exploit this leverage when they have to force most third world governments including Nigeria to adopt adjustment programme preferred by the Bretton wood twins. Being aware that non-agreement with I.M.F and world bank may create unbearable economic hardship, the developing countries including Nigeria ——- get termed up and behaved as directed by victor.
This segment of this chapter will explore the remote and immediate causes of underdevelopment of African states using Nigeria as an example.
At the end of colonialism in Africa, the imperialists left continental economic landscape distorted and disarticulated such that autonomous economic and technological development proved extremely difficult. It is important to note that through the period of colonialism, the Europeans aid not re-invest excess wealth generated with a view to developing local economics. There was no attempt to develop industrial and technological skills, which were important for a viable economic and industrial base. Colonial state in Africa, Nigeria to be precise created dependent local economies and weak state structures. This result has been that post independence Africa (Nigeria inevitably found itself structurally disadvantaged in international division of labour. African found itself dependent in various spheres of human activities some of the features of African economics include:
a.    Trade dependence
b.    Financial dependence
c.    Technological dependence
d.    Psychological dependence
e.    Military dependence
f.    Dependence on foreign grants and aids
Today, Africa is underdeveloped; out of 32 identified most underdeveloped countries of the world, Africa accounts for 22 of the lot. It has also the highest number of land-locked and draught ravaged countries of the world. It has the highest cases of unemployment and refugee problems in the world. It also has the most irresponsible and dictatorial leaders in the whole world running draconian system of governments.
African underdevelopment has be worsened by frequent military interventions and cases of intra-and intern-state conflict. The first has to do with discontinuity of policies while the latter has to do with diversion of scare resources to arms prounment and non-economic activities.
Africa is under great influence of neo-colonialism. By way of definition, neo colonialism means economic domination, subordination and exploitation of foreign economic without the establishment of formal political power and authority. In other words this is a kind of post-independence economic imperialism. The agents are multi-national co-operations (MNCs) and international financial institutions such as IMF and World Bank.
The immediate causes of underdevelopment of African states can be viewed as follows:
Firstly the way in which the goal of national unity and integration was handled: The assumption that the objective of uniting the multi-ethnic and in many cases multi-religious countries of Africa, like Nigeria after decades of colonial strategies of divide and rule was one which could only be constituted from above by the state.
From management of the economic crisis in Africa eg Nigeria was accompanied by increased levels of political repression and exclusion which further widened the gulf between state and society, popular social forces and the wielders of state power.
The IMF/World Bank structure adjustment framework that triumphed in the quest for reversing the divindling economic fortune of Africa not only exacerbated the crisis of decline, but also represented the final nail on the cofin of the post-colonial model of accumulation and the social contract that was built into it. In the face of the failure of structural adjustment to redress the crisis of decline facing the continent, both increased political repression/authoritarianism.
A German leader, Rau identified immediate cause of underdevelopment in Africa states and suggested as follow: that Europe and organization of Economic Co-operation and Development (OECD) countries need to do more to open their markets, especially to Africa’s Agricultural Products and they needed to eliminate their own agricultural subsides. Free access to the markets of OECD countries, in Rau’s evaluation, would mean for developing countries on estimated $100 billion in additional revenue. So, the barriers on the OECD market restructuring African agricultural products encourage instability and terror in Africa socio-economic sectors.
The underlying logic of the economic view is that there is nothing inherently wrong in the economic system that cannot be righted by appropriate adjustment and ecological principles. As long as corruption exists there must be routine deviation from established standards (standards established in developed countries) appropriate adjustments based on good science and ecological principles cannot take place.
It can therefore be asserted that the beautiful and expensive palaces set up through corrupt practices is an evidence of the level of deviation from established standards and plans. It may be funds set aside for road or ecological disaster that has been diverted to build a big house for one man millions are suffering from bad road and thousands are dying for lack of modern health facilitates. What a society, a clan or a family prides itself to have gained through the construction of one beautiful house in that society by a corrupt member of the society the individual citizens loose through the ill-effects of bad roads, absence of environmental and social services that cab ensure sustainable transition at the economic dimension of sustainable development. Meanwhile, corruption in general has far-reaching implication for social and economic development.
Finally, political instability in Africa is another causes of underdevelopment of African states. Forceful change of government by way of military coup’ dat causing abandonment of economic development project.
African countries entered the period after the second world war on the basis of a gradually intensifying popular mobilization against continued colonial domination. The sources of the popular discontent against colonial rule were many but, in summary, they include a strong desire to over turn the affront against human liberty and dignity of the African which colonialism represented; a generalized assertion of the continued, racially based segregation of opportunities for social advancement and access to resources, amenities and services, the increasingly unattainable political administrative framework that denied the colonized full, unfettered participation and representation in the structures of governance, and the intensive draining of the resources of the colonies without a corresponding/commensurate investment in the development of physical and social infrastructure, as well as their human resources formed the basis of the formation of NEPAD.
NEPAD was initiated by African leaders in the year 201 to accelerate the continent socio-economic and political development.
The major aim of NEPAD is the eradication of poverty. And you know going by World Bank statistics about 60% of Nigerians are caught up in core poverty, that is living below expenditure range of $1 per day. NEPAD seeks to eradicate in Africa, promote accelerated growth and sustainable development, not just economic growth but growth and sustainable development. That is, as economic grows, it is spread all across the social strata into the health sector, education, Agriculture, into every sector.
This is all about promoting standard of living in Nigeria NEPAD’s programmes that promotes democracy and good governance seems as essential components of economic development. The business organizations turning Business for African, seeks to boost the private sector throughout the continent and encourage governments to pursue policies that will encourage both domestic and foreign investment.
Meanwhile NEPAD (formerly the New African initiative is an initiative by African leaders to set their countries on the path sustainable growth rights, sound economic management and full participation in the global economy. It is being welcomed internationally as a determined step by Africans to rebuild their continent by encouraging peace and stability, poverty reduction and regional co-operation.
NEPAD is also recognized in its role on the fight of inflation in African. This inflation is created by government asking its central Bank to print more money to meet up with its big project thereby increasing its debts stock and when this is in its debts stock, it primarily affect the inflation.
German government through NEPAD pledged to design and fine-time policies aimed at realizing the goals agreed at the United Nation millennium summit of September, 2000 and promised endeavour to meet the continental project half way on such issues as the fight against HIV/AIDS, help groups threatened with economic and technological marginalization, post conflict rehabilitation etc.
Europe and the organization of Economic Co-operation and Development (OECD) countries through NEPAD opened up their market to Africa’s agricultural products and eliminated their own agricultural subsidies, allow free access to the market of OECD countries, in Rau’s evaluation would mean for the developing countries like Nigeria, an estimated $100 billion in additional revenues.
Talking about America and Canada is important. They, at present as part of the G8 and the EU control the resources of the world. As you had known 48 years of independence have thought us it is not easy to get up without those resources. So, we have to be clever all the way. We must need the resources even if it our resources that have be siphoned there for it to come back, we just have to win them over. This is the way it is. This is why the world “partnership” in NEPAD is absolutely important because it underscores the need that although NEPAD is about an autonomous, home made, indigenous impulse to growth in Africa, we have to be realistic as to how much of the where withal we can generate. You look around every where in Nigeria, you final out that most things you see are imported. We don’t want. So NEPAD is about self-reliance, it is about learning to do it ourselves; about embibing good governance; it is about adopting best practices as they best suit us, and nonetheless it’s about partnership with the developed nations.
Finally, the role of NEPAD to Nigerian socio-economic development cannot be measured since this initiative is truly indigenous development platform


The Challenges Of Nepad To Nigeria Socio-Economic Development

Here it is logical to examine the challenges facing the African indigenous initiative, NEPAD, in its effort to building sustainable socio-economic development in Nigeria.
Examination of these challenges may consequently suggest certain basis question. Has African socio-economic problem changed by requiring a change in the former initiatives which seems indigenous or put differently, what circumstances led to the formation of NEPAD? Are there going to be new problems or is the new economic initiative through its structure and procedures going to tackle those socio-economic problems that could not effectively be handled to the satisfaction of founding fathers previous initiatives?
The world is today linked up and reduced to a global village and these problems and challenges are here with us in Africa. There is a desire for a respectable degree of political, social and economic independence, coupled with high, welfare expectation of the rules. Nations States come together to forge partnership that will enable them make joint decision or delegate these decision to a new body. It is therefore imperative that African be not left out in all the global dynamics, problems and challenges.
The quest for unity in Africa has a deep historical resonance. It was the goal of the fathers of independence and has remained the basis aspiration of African citizens across the continent. Political economic and social unity in Africa is not an alien idea or a programmes imposed from outside.
On the contrary, it springs from the very root of African identity which long resisted being arbitrarily divided into national citizenship.
African has seen many false starts in the last few decades. How do we now know that this is not just another focus for misplaced enthusiasm? Will the current initiatives fall by the way side? Will the world continue to mock African as the land of broken promises of criminalized and failed state that inevitably subvert the best intentions of their people and their development partners? There are some good reasons to hope that things may be different time around. The decision for greater partnership, for better government, for sustainable and improved economic management, because of inescapable pressure both internal and external that really force us to come to learn with the collectives realities that we are facing.
The root of African recovery at the national and sub-regional and continental level is recognizing what has gone wrong and accepting these realities, societies that have solved their basic problems, conflict and mismanagement, have done so, first and foremost, by allowing free bebate, open exchange of ideas and adoptions of pee review mechanism. Where there is secrecy and leadership, there we see that corruption, conflict they say is the best sunlight they say is the best disinfectants.
Let us start by facing the difficult realities of our continent. The fact that our economic are crippled by corruption and mismanagement, that organized crime has penetrated the highest levels of many governments, that many states are adopting the language of democracy and human rights only with the greatest reluctance and that African institutions are weak and incapable of delivering on their mandates.
Across Africa, there is genuine commitment to solving the most pressing problem facing the states of Africa. Africans are supremely skilled at surviving. African people have managed to not only to survive, but also even building businesses and preserve vibrant communities, in countries whose states have collapsed such as Somalia or where the formal economy has disintegrated like Congo, Nigeria etc. If we look at the economic statistics of this country (Nigeria) most of us would have starved to death long ago but we are resourceful and resilient. We have a habit of confounding the worst predictions.
But how are we to transform this expertise at coping to economic and government capacity to putting Africa on the road to conquering poverty and achieving democracy and human right as well as integration and unity? There are high level of initiatives reducing the African union and the idea of NEPAD. We also see steady accretion of best practices in the fields of government and development.
The donour agencies putting high conditionalities on the developing countries for their assistance poses a very big challenge to the African new initiatives (NEPAD)
Regional peace and security is an essential foundation of the integration without it, NEPAD’s energies are wasted. Africa is still seeking what walks in terms of making peace and making it sustainable.
Conflict in various dimensions will continue to render Africa impotent making it unable to more forward and utilize its abundant human and material resources for the benefit of her people. These include ethno-religious and boundary wars. In prosecuting these conflicts, scare resources, which should have been used in development continue to be deployed into purchase of weapons of war.
Unsustainable debt burden is another challenge to NEPAD in the development of Nigeria socio-economic development to which the west is cynical of not abetting and the unfair terms of trade.
Another challenge to NEPAD in the development of Nigeria socio-economic sector include NEPAD’s apparent distance from existing structures such as the African charter for popular participation in development and transformation African union and the outright dependence on the west by NEPAD, contrary to the label it has been given as “home grown initiatives.
Impact Of Foreign Aid On Nigeria Socio-Economic Development

2 Comments on “Impact of Foreign Aid on Nigeria Socio-Economic Development”

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