Nigeria received foreign aid, amounting to $3.37 billion in 2020. The country had the second-highest number of poor people in the world in the same year. Nigeria has been a recipient of foreign aid and development assistance since 1960, basically to achieve economic development and eradicate poverty. However, the country remains a developing country and continues seeking foreign aid.
People living in poverty account for 40 percent of Nigeria’s population, yet an additional seven million people are likely to be pushed into poverty this year because of the rising inflation. The situation of increasing poverty rate begs the question of whether aid is effective in eradicating poverty.
According to Lancaster (1999), “aid is a double-edged sword,” implying that it can boost progress in the right economic and political environment. However, the good intentions of aid may be defeated in a political climate that is not transparent, accountable, free, and fair.
Despite the much economic, social, and humanitarian aid that has been received, many Nigerians who should receive these benefits are deprived. Public officials have mismanaged or stolen more funds over the years.
The root cause of aid ineffectiveness
Global support as aid hasn’t moved Nigeria up the development ladder, and this can be attributed to several factors, including corruption at the forefront and aid dependency. Let’s unpack each of these.
- Government corruption and misappropriation of aid money
According to an article by the United Nations, some unscrupulous leaders pilfered the national coffers and stashed away billions of dollars in foreign bank accounts. By some estimates, they stole close to $400 billion between 1960 and 1999. Sani Abacha alone is estimated to have stolen the equivalent of 2 – 3 percent of the country’s GDP every year he was President.
In May 2016, AP news reported they had suspended payment of Global Fund to Nigeria to fight AIDS, Tuberculosis, and Malaria because of the misappropriation of funds by seven government officials and three ICT consultants over five years (2010-2014).
In Oct 2016, the senate opened a probe into the spending of aid and diversion of grains and other food items allocated to the Presidential Initiative North East (PINE) to IDP camps in the region. In a published report on the state of affairs in the northeast, the senate says, “so much money has been made available by the government with very little to show for it.”
These are just a few examples of how public officeholders use their positions to siphon aid meant to reduce poverty. The purpose of aid is already defeated before it even starts if the political environment is riddled with corrupt politicians blindsided by personal gains instead of the development of the people they represent.
- Habitual reliance on aid of government officials
Sixty-two years and counting, but there has been no significant shift in the paradigm as regards the allotment of aid. In the past two decades (1981 to 2015), countries like China have pulled out 850 million people from extreme poverty with less aid received. That is almost double the number of people living in extreme poverty (478 million people as of 2019 in Africa.) The African continent has received more aid in over 60 years than any other continent.
Nigerian government officials have become accustomed to receiving “free” money from the west so much that they let off the impression that they are not interested in proffering sustainable and lasting solutions to pressing problems. The understanding is that if these problems persist and garner more attention, international and western donors will swoop in with “free money” in the form of aid to save the day.
Knowing that nothing is free, even in Freetown. This is a significant indicator of something wrong with the system. We need a reform that would set us on the right path to actual human development instead of a means to enrich our politicians to the detriment of the people’s development.
Aid is not the solution to the eradication of poverty in Nigeria. Taking a comparative look at China and Africa as a continent in the past two decades, China relied less on aid and more on trade policies and domestic infrastructure investment to get where they are now. Aid might have been effective in poverty eradication if it was effectively managed, but obviously, trade is a better way to eradicate poverty.
Suppose Nigeria takes advantage of the African Continental Free Trade Area (AfCFTA) agreement. In that case, this will not only boost the nation’s economic capacity but also enable businesses to thrive, contributing to the reduction in poverty in the country.