Foreign Aid and Human Development in Sub-Saharan African Countries: Evidence from Quantile Regression

Mohamed Hamdan Idrisa and Salim Hamad Suleiman
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Mohamed Hamdan Idrisa: Department of Fiscal and Financial Policy, Ministry of Finance and Planning, Zanzibar, Tanzania.
Salim Hamad Suleiman: Ministry of Trade and Industrial Development, Zanzibar, Tanzania.

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Abstract: This paper examines the impact of foreign aid on human development as measured by the human development index (HDI) in in Sub-Saharan African (SSA) countries. The study applied quantile regression approach (QR) to find out the effects of foreign aid on human development. The study used panel data for the time range 1997 to 2024 for 30 SSA countries. According to the study, foreign aid and the human development index are often positively linked. Both nations with lower and higher levels of human development are significantly more impacted. In nations with a moderate level of human development, the impact is minimal. The study also discovered that aid had a statistically significant positive effect on the HDI income, health, and education indices. The findings suggest that when foreign aid and HDI have a positive relationship, foreign aid can play a major role in advancing human wellbeing considering HDI as a quantifiable indicator of human progress.

Date: 2026-04-27
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Published in Journal of Economics, Management and Trade, 2026, 32 (5), pp.9-21

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05604411

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