Does Foreign Aid Affect the Economic Growth in Sub-Saharan African Countries?

This study investigates the relationship between foreign aid and economic growth in sub-Saharan Africa using a panel ARDL model. Data from 15 selected countries over 20 years (2002–2021) were analyzed. Findings show that institutional quality and unemployment rate are significant in the short-run (mean group (MG) estimation). In the long-run (dynamic fixed effects (DFE) model), variables such as trade openness, exchange rate, population growth, unemployment rate, institutional quality, consumption expenditure, official development assistance, and aid square significantly affect economic growth. Recommendations include strengthening institutions, promoting trade openness, addressing unemployment through skill development, maintaining price stability, and improving development assistance transparency.