Official Development Assistance and Government Capital Expenditure in Nigeria

This study examined the effect of Official Development Assistance (ODA) on government capital expenditure in Nigeria from 1990 to 2023. Using time series data and regression analysis, the findings revealed that ODA did not have a significant impact on government capital expenditure. This suggests that foreign aid was not effectively utilized in funding infrastructure projects. The study also found that while Gross Domestic Product (GDP) had a positive and significant effect, Foreign Direct Investment (FDI) had a negative impact. These results align with previous research indicating that the effectiveness of ODA depends on institutional factors and economic conditions. Based on these findings, the study recommended improved management of foreign aid, better coordination with donors, and the exploration of alternative funding sources such as public-private partnerships (PPPs). These steps could enhance the effective utilization of external financial inflows for infrastructure development in Nigeria.