Foreign Aids and Economic Growth in Nigeria under Buhari, 2015-2021

The aim of this study is to examine the impact of foreign aid and external borrowings on economic development of Nigeria. The study was qualitative in nature as data collection was based on the secondary sources. The two-gap model and the endogenous growth models would complement one another in establishing the theoretical base for this study. The study revealed that external debt does not impact economic growth in Nigeria both in the long run and short run, substantiating on the inapplicability of the two-gap theory, which establishes that external finance can fill savings gap to propel an economy towards achieving a target growth rate. Therefore, the study recommends adequate measures to be put in place to manage borrowed fund by ensuring that borrowed fund are expended on capital project that will generate income and there should be appropriate measures in place that will serve as checks and balances on government spending such as institutional framework for analyzing and managing public investment projects. Also, borrowed funds should be channeled to the purpose in which they have been borrowed this will help foster economic development. Furthermore, the government should work towards freeing up more expenditure for capital project, as this stimulates growth, encourage productivity as against the current focus on more recurrent spending, which only compounds our fate as a consuming nation, thereby affecting long run growth in the country.