The Dynamics of Foreign Aid Trends and Patterns Among Low- Income Countries in Africa

Tefera Mamo G. () and Nicholas Odhiambo
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Tefera Mamo G.: University of South Africa, Department of Economics, P.O Box 392, UNISA 0003, Pretoria, South Africa

Folia Oeconomica Stetinensia, 2020, vol. 20, issue 2, 403-422

Abstract: Research background: Foreign aid flows to Africa mostly the Low-Income Countries (LICs) have increased drastically since 2000. Increasing aid flows are expected to stimulate economic growth that can release resources towards enabling LICs to reduce aid dependency.Purpose: The purpose of this study is to discuss the dynamics of bilateral aid trends and patterns among 27 LICs in Africa during 2000–2017. The main question this study tries to answer is: how have aid sources, compositions and dependency changed in LICs?Research methodology: The study employs a descriptive analysis technique to analyses bilateral aid flows to LICs in Africa from 50 donors during 2000–2017.Results: Total net aid flows to LICs increased by 1.5 times during 2000–2017 and were predominantly in the form of grants (92.7%). The study found a shift of sectoral aid allocations from the economic and productive sectors towards the social sector. Net aid as a share of GDP increased almost two-fold; implying an increasing trend of aid dependency in several LICs.Novelty: This study tries to present a full account of bilateral aid flows both from Traditional Donors (TDs) and Non-Traditional Donors (NTDs), unlike many earlier studies that have focused on TDs.

Keywords: Foreign aid; sectoral aid allocation; Low-Income Countries; aid dependency; Africa (search for similar items in EconPapers)
JEL-codes: F35 N47 O55 Y10 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:foeste:v:20:y:2020:i:2:p:403-422:n:29

DOI: 10.2478/foli-2020-0056

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