FOREIGN AID AND ECONOMIC GROWTH IN SUB SAHARA AFRICA COUNTRIES

Abstract

The effects of external aid to the developing countries on economic growth have been controversial in the economic literature for many years, and economists have made various statements on this issue. This thesis analyzes the effects of foreign aid on economic growth in Sub-Saharan African countries. In this study, the annual data of 29 sub-Saharan African countries between 1990 and 2017 were used. The main hypothesis of the thesis is that foreign aid promotes the economic growth in Sub-Saharan Africa. The hypothesis was tested using panel data on foreign aid. As a result of the large-scale literature review and econometric analysis, the foreign aid of developed countries and organizations to Sub-Saharan African countries has had a negative and insignificant impact on the economic growth in the long-term.