Africa as a continent suffered a great deal during the colonialera. This included the immeasurable loss in growth and development botheconomically and politically. For the sake of survival, the continent had nochoice but to turn back to the West and depend on foreign assistance in otherto grow and develop. The raw materials and natural resources in this region hadalready been exploited without consideration for the Africans.
Nigeria, beingpart of Sub Saharan Africa, located in the Western region was not an exception.After most countries had gained independence, the colonial masters introduced anew concept called “Development politics” for the ex-colonies in order tomaintain their ties and secure control of the resources, economy and politicsin this region. Development politics then evolved into development aid (foreignaid) which was a mechanism designed to provide help to develop the new states. The European DevelopmentBank was then created by the European Community (E.C.) to fund the formercolonies for their development as newly independent states. According to the E.C.
Agreement, development politics was aimed at promoting sustainable economic andsocial development as well as foster democracy and rule of law to theunderdeveloped countries (Monar, 2000:119). With development aid, the E.C.
hoped to put a stop to the spread of communism by the Eastern bloc to the new,underdeveloped states.Aidwas usually provided to nations that survived long lasting or lengthy periodsof conflicts and desperately required peace building missions and activities.Aid also served as a means of promoting electoral processes or to strengthennew political formation and civil societies along with providing assistance ina nation where there was insecurity or threat to security.Economicaid is a post war occurrence which was initially a means of narrowing the gapbetween under developed nations and industrially advanced nations. It was alsoregarded as a major weapon for winning the Cold War. It served as an economicdevelopment strategy influenced by developed economies during the late 1940s,following the success of the Marshal Plans (Emma, 2005)(Chukwuemeka, 2005:55).
TheOfficial Development Assistance (ODA) was the chief regulator of aid to countriesbefore the establishment of Bretton Woods institutions such as the IMF, WorldBank and such assisted in granting loans and aid to countries facing seriouseconomic crisis and needed urgent help for escape. As of 2014, the net officialdevelopment assistance and official aid received in Nigeria was $2,436,950,000.(OECD, 2014)Therole of foreign aid in the overall development of a nation has held opposingviews in past years. The ultimate goal of foreign aid is to put an end toextreme world poverty and increase the level of development in Less DevelopedCountries (LDC).
Various studies, however, hold different opinions. Whereas,Addison, Mavrotas and McGillivray (2005) are in support of the positive impactof foreign aid on the growth and development of a nation, Abegaz (2005) hassubstantial evidence of the negative impact of foreign aid on growth anddevelopment of a nation. With an indifferent view and stand, the AfricanDevelopment Bank (AfDB) is of the opinion that aid has no impact whatsoever ongrowth and development in a nation. Developingcountries like Nigeria are recognized for their inability to fully maximizetheir resources and as such, depend on the assistance of developed countries fortheir growth and development. These countries are also largely associated withhigh rate of poverty, low level of income, high level of unemployment and thelikes. Foreign aid could therefore be considered as a reasonable option forsupplementing the savings-investment gap that is witnessed in the country.
Nigeria has been a major beneficiary of foreign aid eversince her independence in 1960.Nigeria is rated as Africa’s largest economy and the 21stlargest economy in the world by the International Monetary Fund IMF (2016).In addition to this, Nigeria that was once amongthe 50 richest countries in the world in the 1970’s has been demoted to nowbelong to the class of the 25 poorest countries in the world. What is indeedironic is that Nigeria, who is the sixth largest producer of oil also holds thetitle of being the host to the third largest number of poor people in the worldaside China and India (Igbuzor, 2006:140) Although Nigeria is still benefitting from foreign aid and allsorts of foreign assistance in different aspects of her economy which includesreceiving almost the same amount as in the early 1980s, socio-economicdevelopment has remained dismal (Fasanya& Onakoya, 2012).