Declining International Development Aid in Nigeria
International development funding has long played a pivotal role in Nigeria’s socio-economic growth. International aid can be defined as financial or technical help given by one country’s government to another country to assist social and economic development or to respond to a disaster1. This is often in the form of grants, loans, and subsidies but could also include technical advice, training, and commodities. The donor nations are often better off economically than the recipient countries. Originating in the post-World War II era, development aid was initially driven by the need to rebuild war-torn Europe2. This initiative soon expanded to address global poverty and underdevelopment, leading to the establishment of major aid organizations such as the World Bank and the International Monetary Fund (IMF). Fundamentally, international aid has been crucial in addressing global challenges such as poverty, health crises, and education deficits and often seen as ways of upgrading social structure of recipient countries. In Nigeria, international aid began to flow significantly in the 1960s after its independence, aimed at fostering development, reducing poverty, and enhancing infrastructure3.
International development funding has been instrumental in supporting various sectors in Nigeria, including health, education, and infrastructure. These funds have enabled the implementation of numerous programs and projects that have contributed to the nation’s development. For instance, international aid has helped combat diseases such as malaria, HIV/AIDS, and polio, reducing mortality rates and improving overall public health4. Additionally, funding for educational initiatives has improved literacy rates and increased school enrollment, particularly for girls. Furthermore, access to quality education has led to a reduction in poverty and a boost in economic growth, benefiting individuals and communities alike. Over the years, there has been a noticeable decline in international aid to Nigeria.
Even though there has been an overall decline in aid, several key international donors continue to play a vital role in Nigeria’s development. The United States Agency for International Development (USAID) remains one of the largest donors, focusing on health, education, and governance. USAID’s efforts in combating HIV/AIDS through the President’s Emergency Plan for AIDS Relief (PEPFAR) have been particularly impactful, providing treatment and support to millions of Nigerians5. The EU’s support for the Nigerian electoral process has been crucial in strengthening democratic institutions and promoting fair elections6. The United Kingdom, through its Department for International Development (DFID), now integrated into the Foreign, Commonwealth & Development Office (FCDO), continues to support programs in health, education, and economic development7.
The Global Alliance for Vaccines and Immunization (GAVI) has contributed massively to strengthening Nigeria ‘s healthcare system through immunization and vaccine support8. There are also multilateral organizations, such as the World Bank, the African Development Bank (AfDB) and more, who have maintained their support for Nigeria. The World Bank’s projects in infrastructure, agriculture, and social protection have been instrumental in promoting sustainable development. Similarly, the AfDB’s investments in energy, transport, and agriculture have contributed to economic growth and poverty reduction. In addition to bilateral and multilateral organizations, the international community has also provided support for Nigeria through various initiatives and programs aimed at promoting economic development and stability.
While international aid has significantly contributed to Nigeria’s development across various sectors, recent years have seen a troubling decline in these critical funds. This shift poses a threat to the sustainability of past achievements and the future of Nigeria’s socio-economic growth. The donor landscape today is much more complex than it was 30 years ago when the donor community shifted its approaches to development assistance and more clearly linked this assistance to peace and security issues5. However, the past decade has seen a noticeable decline in the level of funding provided by international donors. The cause of the decline is multi-faceted spanning from the shift in donor priorities, to the global economic downturn, to the Nigerian internal challenges. The decline in aid can also be attributed to the changing nature of the humanitarian landscape and the increasing complexity of crises around the world.
Impact of the Decline in International Development Funding
The reduction in international funding has left critical sectors such as health and education underfunded. Without adequate resources, hospitals and clinics struggle to provide essential services, and schools face shortages of materials and qualified teachers. The decline in development aid exacerbates poverty and inequality in Nigeria. Many development programs aimed at poverty alleviation rely heavily on international funding. As these funds dwindle, the programs are scaled back or discontinued, leaving the most vulnerable populations without support. The gap between the rich and the poor widens, creating deeper societal divisions.
Nigeria’s progress towards the Sustainable Development Goals (SDGs) has slowed due to the decrease in international funding. Goals related to health, education, gender equality, and poverty reduction are particularly affected. Without sufficient financial support, it becomes increasingly difficult to meet the targets set by SDGs, hindering the overall development agenda. Reduced funding means that fewer services and support systems are available, increasing their risk of exploitation, poor health outcomes, and limited educational opportunities.
Causes of International aid decline in Nigeria
The decline in financial support has caused a ripple effect, impacting various sectors including healthcare, education, and infrastructure. As the nation’s finances continue to downturn, it becomes imperative to understand the causes, consequences, and potential solutions to mitigate the impact of dwindling international aid. Several factors have contributed to the decline in international donor funding4. The persistent decline in the international funding coming into Nigeria can also be attributed to the global economic challenges which is being experienced in every country. The 2008 Global financial crises as well as the economic downturn as a result of the pandemic have significantly put a strain on donor countries’ budget. Additionally, many donor countries are major oil importers, and the volatility of oil prices has an impact on the global economy which has prompted a cut down on aid budget.
First, certain programs, such as health programs that were supported by donors have achieved their initial scaling-up goals and have developed into stable programs. In these situations, donors are increasingly eager to transfer these programs to be owned by the beneficiary country to reduce long-term overdependence. In recent years, there has been a shift towards funding issues perceived as more urgent or politically advantageous. For instance, increased focus on climate change, migration, and global security has diverted resources away from traditional development aid8. Nigeria, consequently, receives less attention and funding as donor priorities evolve. Moreover, there is a growing sentiment among some donor countries that aid should be strategically targeted or linked to specific outcomes, rather than provided as general support9. This shift in perspective has also contributed to a reduction in overall aid levels.
There exists a phenomenon known as donor fatigue10. This is a situation where prolonged aid and support subsequently leads to decrease donor enthusiasm. Donors like to donate funds where they can see the impact of their support and when this is not the case, the enthusiasm can easily drop11. In Nigeria’s case, after decades of receiving international aid without any substantial improvement in the poverty index and development indicators, there is a high chance that donor fatigue can set in12. There is now a growing emphasis on sustainability and empowering the recipient country to mobilize their own resources and reduce dependency on foreign aid. Efforts towards sustainability may include encouraging investment in private sector, tax generation and local revenue generation. There is also the decreasing public support for foreign aid, which has made to some governments to reevaluate their foreign aid policies and consider alternative ways to address global humanitarian crises.
The existing bad governance and politics in Nigeria has reduced the influx of foreign aid into Nigeria. Corruption, lack of transparency and weak institutional framework have long become major concerns for international donors. Reports of funds mismanagement and lack of accountability have made the donors become hesitant to commit large amount of money without any assurance of an effective use of their contribution to international development. Political instability and insecurity further complicate the aid landscape in Nigeria. The risks that come with investing in an unstable and unpredictable environment will lead to a redirect of the funds to countries with stable and reliable environment.
Possible solutions to address the decline in International Development Funding
To regain the Nigerian ‘s donor confidence, Nigeria must begin to prioritize strengthening her governance and accountability mechanisms. Implementing robust anti-corruption measures and ensuring the transparent management of funds are essential to ensure accountability systems exist in the country7. Establishing independent oversight bodies and enhancing the judicial system to prosecute corrupt cases can help restore trust and attract international funding. This will go a long way to further contribute to restoring trust and attracting international funding.
On a long-term basis, there is a need for Nigeria to diversify its funding sources and seek new partnerships. Beyond traditional donor countries, emerging economies, private sector investors, and philanthropic organizations offer potential avenues for funding. With the high rate of emigration in Nigeria, innovatively engaging with the diaspora community and encouraging remittances can also provide additional financial support for development initiatives. Investing in domestic resource mobilization is crucial for reducing dependence on international aid.
Nigeria has abundant natural resources and a large population that can contribute to its development. However, certain challenges such as inadequate infrastructure, inadequate education and training, corruption and political instability, and limited access to finance, need to be addressed, for Nigeria to become a major player in the global economy and achieve sustainable development. By improving tax collection systems, reducing tax evasion, and promoting economic growth, the country can generate more internal revenue to fund its development programs. It is essential to prioritize development projects and focus on initiatives that can generate long-term benefits and scalability can maximize the use of available resources.
There are no doubts that international aid has supported the development of low- and middle-income countries including Nigeria, however the country cannot completely cut off foreign aid because these contributions either in funds or kind continue to remain critical in addressing the country ‘s development needs. As a country, we ought to navigate towards sustainability, be able to generate revenue locally and reduce dependency on international aid. It is essential for Nigeria to continue improving governance and financial management to attract and effectively utilize international assistance in the future.
- Abdul, Zainab and Adamu, Abdul and Ogwuche Iduh, Peter, Effect of Foreign Aid on Economic Development in Nigeria (2018). Abdul, Z.H. ADAMU, A. & Ogwuche, I.P. (2018). Effect of Foreign Aid on Economic Development in Nigeria. AE-Funai Journal of Accounting Business and Finance (FJABAF) 3(1) 15 – 29., Available at SSRN: https://ssrn.com/abstract=3596145
- Whyte, A. (2004). Landscape analysis of donor trends in international development. New York: Rockefeller Foundation.
- Uzonwanne, Maria and Ezenekwe, Uju, Impact of Foreign Aid on Capital Generation in Nigeria (September 11, 2015). International Journal of Economics, Commerce and Management Vol. III, Issue 9, September 2015.
- Abdul, Z.H. Adamu, A. & Ogwuche, I.P. (2018). Effect of Foreign Aid on Economic Development in Nigeria. AE-Funai Journal of Accounting Business and Finance (FJABAF) 3(1) 15 – 29
- Barney, R. J., Sar, B. K., Robinson, M. A., Johnson, L. M., Buckingham, S. L., & Friedrich, J. M. (2010). The President’s Emergency Plan for AIDS Relief (PEPFAR): A Social Work Ethical Analysis and Recommendations. The Journal of Sociology & Social Welfare, 37(1). https://doi.org/10.15453/0191-5096.3491
- Osinakachukwu, N. P., & Jawan, J. A. (2011). The Electoral Process and Democratic Consolidation in Nigeria. Journal of Politics and Law, 4(2). https://doi.org/10.5539/jpl.v4n2p128
- Fasanya, I. O., & Onakoya, A. B. (2012). Does Foreign Aid Accelerate Economic Growth? An Empirical Analysis For Nigeria. International Journal of Economics and Financial Issues, 2(4), 423-431.
- Lakshmanasamy, T. (2016). Does Conditional Aid Promote Performance? A Regression Discontinuity Analysis of the Impact of GAVI Alliance on Immunisation in Developing Countries. Artha Vijnana: Journal of The Gokhale Institute of Politics and Economics, 58(1), 19. https://doi.org/10.21648/arthavij/2016/v58/i1/121272
- Jayaraman, R., Teirlinck, M., & Kaiser, M. (2023). Charitable donations to natural disasters: evidence from an online platform. Oxford Economic Papers, 75(4), 902–922. https://doi.org/10.1093/oep/gpad029
- Awadari, A. C. (2020). Donor fatigue phenomenon: Trend and circumvention in Northern Ghana. International Journal of Financial, Accounting, and Management, 1(4), 191-198.
- Okhakhu, P., & Tashok, H. (2019). Climate Change and Global Security in the 21st Century: A Geo-Political Assessment. Developing Country Studies, 9(2). https://doi.org/10.7176/dcs/9-2-04
- Sharp, J. M., & Humud, C. E. (2005, June). US Foreign Assistance to the Middle East: Historical Background, Recent Trends, and the FY2006 Request. Congressional Research Service, the Library of Congress.8(9),234
