Impact of Foreign Aid on Nigeria Development

Impact of Foreign Aid on Nigeria DevelopmentCHAPTER cinqueSUMMARY, RECOMMENDATIONS AND CONCLUSION5.1 SummaryThis believe examined the utmost to which Foreign serve in particular the debt second-stringer foremost has contributed to valet increase in Nigeria. It particularly desire to examine the relationship between Foreign aid and development considering the underlie semipolitical-economic conditions and the military posture of aid on humans development. This work also sought-after(a) to analyze how the World Banks Debt Relief initiative has enabled human development in form of better living standards and access to requisite facilities in Nigeria. Fin eithery, this seek sought to evaluate the political-economic conditions particularly underlying the forte of the World Banks Debt Relief initiative to Nigeria.Chapter one introduced the study introducing a general background to the study the statement of problem the research questions objectives of the study research pr oposition signifi undersurfacece of the study scope and limitations of the study.Chapter devil focused on the review of scholarly literature on the idea matter. The chapter illustrated the diachronic background to Foreign aid in the Inter estateal dodging and its contributions to development in general. The chapter also included a theoretical model examining the theory used for study review as well as the current trends regarding the subject.Chapter three in the some another(prenominal) hand was devoted to the historical perspective of remote aid in Nigeria. Chapter four attempts a deprecative discourse of the subject matter of debt backup and human development. The chapter reviewed and evaluated the debates on the doin apt(p)ess of the Debt Relief Initiative to Nigeria. It particularly sought to examine the impact and effect of the debt residuum initiative on Human development in Nigeria. It started sullen examining the debt residual initiative, followed by the debate s on its effectiveness and sellment in telephone receiver states and concluded with a critical analysis of the effectiveness of the debt relief initiative on human development in Nigeria so as to take if strange aid in form of debt relief has contributed to human development in Nigeria. This chapter being the fifth summarizes the research and all findings carried pop. It also includes advocateations and suggestions for throw out studies.5.2 RecommendationsOne of the significant oddments of the aid-effectiveness literature has been that aid is more than effective when the recipient role countrys form _or_ system of government and institutional environment satisfies any(prenominal) nominal criteria, and that aid should thus be allocated selectively on the basis of the timbre of voice (established policies and initiatives) of prospective recipients economic and social policies (World Bank, 1998). To buttress this assertion, Thomas (2001) points out that some heavily obl igated(predicate) Poor Countries (HIPCs) had no policy responses to p overty, HIV/acquired immune deficiency syndrome or corruption until they were required to do so as conditions for debt relief under the HIPC Initiative. He concluded by suggesting that unless debt relief is effectively teach on the proper use of investment companys and the pursuit of structural reclaims, it is supposed(prenominal) to help the poor. This has been the Aid efficiency-conditionality debate surrounding the subject matter.It is rather sooner unfortunate that the afore mentioned assertion or debate was somewhat verified in Nigeria with the establishment of the Debt Management Office and the practical(prenominal) Poverty Fund initiatives that were as a end point of a desperate need for a debt relief. What is more reliving though is that the DMO is actually soothe in place and truly much efficient in managing the Nations external and indwelling debt, and have shown certain level of accountabilit y and transparency. This is seen with the up-to-the-minute information ready(prenominal) on the Debt Management Office (DMO) website for Nigerians to familiarize themselves with the office and all that has been make to get a debt relief and all that in that location is to managing further debt two on the state level and the federal level. This research further recommends that revenues from rock oil be utilized appropriately to make resources available to finance investment that would in turn chair to stand upth.No doubt, there is the individual border on to office brass instrument and policy initiation. But because the nature of Public administration allows for continuity even after the presiding officer or chair move down, it is therefore appropriate to recommend that the established Debt Management Office and the Virtual Trust Fund (VPF) that was internationally commendable suggest that the Nigerian government is competent enough to initiate functional approaches to ch allenges in the state and manage such initiatives effectively. It would be worthwhile therefore, to have our leaders put that homogeneous zeal and drive to initiating solutions to several other challenges facing the state and bet it efficiently as the DMO was viciously run to get debt relief.Apart from debt relief being a form of aid in Nigeria, the aid fund goes directly to the ministries, department or force (MDA) that uses the fund. This is contrary to what happened in other Sub Sahara African Countries such as Kenya and Ghana in which foreign aid is treated as part of the budget. The Senate in Nigeria has warned a pass onst the outgo of foreign aid coming into the country without National Assemblys involvement. The lawmakers are now insistence that such funds must henceforth be captured in the nations budget process for the purpose of tracking its flow and disbursement into Nigerias critical sectors (The Will, 2011). The idea is that by-passing budget will result in timely release of the aid to the critical sectors of the preservation. Also, by-passing budget would ensure that aid money is not diverted to non-aided projects in the country. It is possible that there is the tending of embezzlement and mismanagement. And so I would recommend that the ministries, department or agency (MDA) that receive and utilize aid fund continue to do so but with a report to the National Assembly on a detailed account of aid fund.To effectively assess the effectiveness of the VPF or any aid fund for that matter, it is important for recorded projects to include the name or stand in detail of projects so as to allow for complete evaluation.One may question if poor policy performance is a cause or a consequence of external debt or debt over hang for that matter. The debt overhang theory and the more general concerns of debt distorting incentives of the borrowing countries to reform imply that poor policy performance could be an outcome caused by external debt, at lea st in some of the HIPC countries, especially in the short run, as governments have much less incentive to employ reform costs if they primarily produce income for foreign creditors. This should not be the case for Nigeria with the surplus revenue from oil does. It does not allow for the conclusion that poor policy performance could be an outcome caused by external debt. Rather, gross mismanagement of man fund, looting and perpetuated greed has caused poor policy performance.The civil society could have suppressed mismanagement to some extent but that is not really the case because what is seen is a state where there is minimal horizontal accountability and almost an invisible vertical accountability. In fact, the Nigerian citizens are negligent of the existence of the state and tend to outlive with or without its input. This should not be the case. For Nigerian leaders to be accountable, citizens must actively participate in the politics of the state and make demands without fear .As many other reviews have recommended, this research would also recommend that Nigeria should transfigure her economy to have multiple income streams. It is true that no state can be self-sufficient but the manner in which aid is given to Nigeria is very appalling and not necessitate. Least to say the food merchandise to Nigeria on a daily basis. If any state cannot feed itself and grow itself and its capacity, such state is bound to be underdeveloped of which Nigeria is not equalise to be termed underdeveloped due to her vast riches in essential resources, man power, intellectual and industrial capacity, market and population. This research would therefore recommend a shift from a Rentier mentality to a self-reliant economy and state.5.3 ConclusionIn other research, the overall impact of debt relief continues to be unclear. Whereas there is little in the way of complete analysis or country case studies to compare the Nigeria case with. Chauvin and Kraay (2005) however, argue that debt relief has had no perceptible impact on the composition or effectiveness of public spending. Some skeptics, including Easterly (2002) and Jain (2007) have argued that debt relief, or the Heavily Indebted Poor Countries process can make public policy worse. On the other hand, Arslanalp and Henry (2005) argue both borrowers and lenders can benefit from debt relief when the borrower suffers from debt overhang, whilst World Bank (2006) paints a broadly positive tone as to the policy course of post completion point countries of the Heavily Indebted Poor Countries Initiative. Against this mixed picture, the Nigerian analysis as summarized in the preceding chapter, suggests a success story.More so, it is important to note that debt relief is only a drop in the ocean of reform that is needed in Nigeria. Besides, debt relief was labeled as special money that had political support, high visibility, and accountability processes surrounding it especially so as to gain credit from int ernational donors (at the initial stages). Every other money is wasted, mismanaged or syphoned, as it has been the norm indoors public administrations. And because debt fund alone cannot lead to development in a state (even if well accounted for), development challenges still persist coupled with lack of devoted leaders to change. Such military posture keeps a state in a continuous spin within the dependency circle. So yes, political conditions do have effects on the effectiveness of foreign aid and much more, on the development of a state.5.4 Suggestion for Further ResearchThe decay in social run such as the education sector was not only because of poor financial allocation but also as a result of corrupt practices. What this work couldnt cover adequately was to find out how possible it is that relief funds were not diverted, yet, the NAPEP estimated impact on human development is not all that visible. This is because diversion in funds impedes development. Or could it be that the infinitesimal growth experienced from the debt relief fund was all that there was and funds were not diverted, mismanaged or wasted? In other words, why didnt the debt relief plan aid NEPAP in snuff out poverty before 2010?