Authors : P.B. Eregha and I.R. Irughe
Abstract: This study examines the impact of foreign aid inflow on domestic savings in Nigeria. This study is necessitated by the fact that most studies examine this issue with either panel data analysis or cross-country analysis framework, which do not really show specific country characteristics and moreover, there is no time series analysis on the impact of foreign aid on domestic savings in Nigeria. The study employed Ordinary Least Square method of estimation with an autoregressive model to examine the short run and long run elasticity coefficients of this impact. Data for the study were mainly secondary source extracted from the World Development Indicator, 2007. The study revealed that both at the short run and steady state, foreign aid inflow to Nigeria has positive effect on domestic savings. However, total debt service payment has negative impact on domestic savings. The study then recommends that policies aim at reducing the dependency and proper use of foreign aid should be implemented.
P.B. Eregha and I.R. Irughe, 2009. An Empirical Analysis of the Short Run and Long Run Impacts of Foreign Aid on Domestic Savings in Nigeria. Journal of Economics Theory, 3: 53-56.