The Nuex Between Foreign Aid and Economic Growth in Sierra Leeone (1994 -2024)

Moses Balla Marah; Saidu Kallah Fofanah; Saidu Kargbo

doi:doi:10.11648/j.ijefm.20251303.11

Research Article |

| Peer-Reviewed

The Nuex Between Foreign Aid and Economic Growth in Sierra Leeone (1994 -2024)

Moses Balla Marah^*, Saidu Kallah Fofanah, Saidu Kargbo

Published in International Journal of Economics, Finance and Management Sciences (Volume 13, Issue 3)

Received: 7 March 2025 Accepted: 22 March 2025 Published: 9 May 2025

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

This study investigated the relationship between foreign aid and economic growth in Sierra Leone using annual data from 1994 to 2024. Specifically, the study first, estimated the impact of foreign aid on economic growth; and second, the study investigated the direction of causality between foreign aid and economic growth in Sierra Leone. The ordinary least square estimation technique was used for analysis. The empirical findings suggest that foreign aid inflow into Sierra Leone is imperative for economic growth in Sierra Leone. The study further found that gross capital formation and labour force impact significantly on economic growth whereas, foreign direct investment impacts negatively and insignificantly on economic growth. The study further found that there is no causality between foreign aid and economic growth in Sierra Leone within the period under review. Based on the findings from this study, it is recommended that vigorous effort should be made by government to create a stable economic and political environment and effective competitive policies. This work has tried to emphasize that aid programmes should be broadly consistent with a strategy aimed at developing human capital. In the absence of foreign aid, there is no doubt that the height of development in human capital in Sierra Leone would be even lesser than that prevailing. This work recommends that foreign aid could be better prioritized in the following ways; In order to lessen the extreme disparity that exists in Sierra Leone, foreign aid must be directed more specifically at individuals living in the poorest areas of the nation. The rate of school dropouts will decrease with less disparity, notably in Sierra Leone. Additionally, recent studies show that nations with less inequality have a higher likelihood of improving their literacy rates as a result of foreign help. Therefore, there should be more foreign aid programs launched in each of Sierra Leone four geopolitical zones.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 13, Issue 3)
DOI	10.11648/j.ijefm.20251303.11
Page(s)	70-83
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2025. Published by Science Publishing Group

Keywords

Foreign Aid, Official Development Assistants, Economic Growth, Sierra Leone

References

[1]	Amakon U., Ezema B. and Okeke N. (2010), Has Foreign Aid Improved Economic Goverrnance in Nigeria? An Inquiry into Official Development Assistance Effectiveness. Journal of Economic Studies Vol. 9. No. 1. November.
[2]	Adelakun, O. J. (2011). Human Capital Development and Economic Growth in Nigeria. Canadian Social Science Journal, Vol. 7(2), 207-218.
[3]	Ajayi K (2000), International administration and economic relations in a changing world, Ilorin Majab Publishers.
[4]	Arndt, C., Jones, S. and Tarp, F. (2007). Aid and Development: the Mozambican Case, In Lahiri, S. (ed.), Theory and Practice of Foreign Aid, Frontiers of Economics and Globalization, Volume 1, Amsterdam: Elsevier.
[5]	Ahmad, Y (2001) Causal Relationship between Domestic Savings and Economic Growth: Evidence from Seven African Countries, African Development Bank, Blackwell publisher, Oxford.
[6]	Ali, S. and Ahmad, N. (2013): A Time Series Analysis of Foreign Aid and Income Inequality in Pakistan. Global Journal of Management and Business Research Economics and Commerce, 13(5).
[7]	Bakare AS (2011). The Macroeconomic Impact of Foreign Aid in Sub-Saharan Africa: The Case of Nigeria, Business and Management Review; 1(5): 24-32.
[8]	Hassen, A. (2011). “Effectiveness of foreign aid in Sub Saharan Africa: Does disaggregating aid into bilateral andmultilateral components make a difference?, Journal of Economics and international finance, vol. 3(16), pp. 801-817.
[9]	Papanek, G. (1973). “Aid, Foreign Private Investment, Savings and Growth in Less Developed Countries.” Journal of Political Economy 81, pp. 120-130.
[10]	Papanek, G. (1972). “The Effect of Aid and Other Resource Transfers on Savings and Growth in Less Developed Countries.” Economics Journal 82.
[11]	Todaro MP and Smith S (2010). Economic Development (11th ed.) Pearson Education Limited, London.
[12]	Barro, R. J. (1990). Government spending in a simple model of endogenous growth. Journal of political economy, 98(5, Part 2), S103-S125.
[13]	Barro, R. J., (1990), “Government spending in a simple model of endogenous growth”; Journal of Political Economy, 98(S5), pp. 103-125.
[14]	Dalgaard, C. J., & Erickson, L. (2009). Reasonable expectations and the first millennium development goal: how much can aid achieve? World Development, 37(7), 1170-1181.
[15]	Dalgaard, C., and Hansen, H. (2010). Evaluating Aid Effectiveness in the Aggregate: A critical assessment of the evidence. MPRA Paper 23026, University Library of Munich, Germany.
[16]	Dalgaard, C., Hansen, H., and Tarp, F. (2004). On the Empirics of Foreign Aid and Growth. The Economic Journal, 114, pp. 191-216.
[17]	Gujarati, D. M., & Porter, D. (2013). Basic Econometrics (5th ed.) USA: Bell and Bain Limited.
[18]	Okonjo-Iweala N, Soludo C and Muhta M (2003). The debt trap in Nigeria. Trenton NJ: Africa World press Inc.

Cite This Article

Plain Text BibTeX RIS

APA Style

Marah, M. B., Fofanah, S. K., Kargbo, S. (2025). The Nuex Between Foreign Aid and Economic Growth in Sierra Leeone (1994 -2024). International Journal of Economics, Finance and Management Sciences, 13(3), 70-83. https://doi.org/10.11648/j.ijefm.20251303.11

Copy | Download

ACS Style

Marah, M. B.; Fofanah, S. K.; Kargbo, S. The Nuex Between Foreign Aid and Economic Growth in Sierra Leeone (1994 -2024). Int. J. Econ. Finance Manag. Sci. 2025, 13(3), 70-83. doi: 10.11648/j.ijefm.20251303.11

Copy | Download

AMA Style

Marah MB, Fofanah SK, Kargbo S. The Nuex Between Foreign Aid and Economic Growth in Sierra Leeone (1994 -2024). Int J Econ Finance Manag Sci. 2025;13(3):70-83. doi: 10.11648/j.ijefm.20251303.11

Copy | Download

@article{10.11648/j.ijefm.20251303.11,
  author = {Moses Balla Marah and Saidu Kallah Fofanah and Saidu Kargbo},
  title = {The Nuex Between Foreign Aid and Economic Growth in Sierra Leeone (1994 -2024)
},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {13},
  number = {3},
  pages = {70-83},
  doi = {10.11648/j.ijefm.20251303.11},
  url = {https://doi.org/10.11648/j.ijefm.20251303.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20251303.11},
  abstract = {This study investigated the relationship between foreign aid and economic growth in Sierra Leone using annual data from 1994 to 2024. Specifically, the study first, estimated the impact of foreign aid on economic growth; and second, the study investigated the direction of causality between foreign aid and economic growth in Sierra Leone. The ordinary least square estimation technique was used for analysis. The empirical findings suggest that foreign aid inflow into Sierra Leone is imperative for economic growth in Sierra Leone. The study further found that gross capital formation and labour force impact significantly on economic growth whereas, foreign direct investment impacts negatively and insignificantly on economic growth. The study further found that there is no causality between foreign aid and economic growth in Sierra Leone within the period under review. Based on the findings from this study, it is recommended that vigorous effort should be made by government to create a stable economic and political environment and effective competitive policies. This work has tried to emphasize that aid programmes should be broadly consistent with a strategy aimed at developing human capital. In the absence of foreign aid, there is no doubt that the height of development in human capital in Sierra Leone would be even lesser than that prevailing. This work recommends that foreign aid could be better prioritized in the following ways; In order to lessen the extreme disparity that exists in Sierra Leone, foreign aid must be directed more specifically at individuals living in the poorest areas of the nation. The rate of school dropouts will decrease with less disparity, notably in Sierra Leone. Additionally, recent studies show that nations with less inequality have a higher likelihood of improving their literacy rates as a result of foreign help. Therefore, there should be more foreign aid programs launched in each of Sierra Leone four geopolitical zones.
},
 year = {2025}
}

Copy | Download

TY  - JOUR
T1  - The Nuex Between Foreign Aid and Economic Growth in Sierra Leeone (1994 -2024)

AU  - Moses Balla Marah
AU  - Saidu Kallah Fofanah
AU  - Saidu Kargbo
Y1  - 2025/05/09
PY  - 2025
N1  - https://doi.org/10.11648/j.ijefm.20251303.11
DO  - 10.11648/j.ijefm.20251303.11
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 70
EP  - 83
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20251303.11
AB  - This study investigated the relationship between foreign aid and economic growth in Sierra Leone using annual data from 1994 to 2024. Specifically, the study first, estimated the impact of foreign aid on economic growth; and second, the study investigated the direction of causality between foreign aid and economic growth in Sierra Leone. The ordinary least square estimation technique was used for analysis. The empirical findings suggest that foreign aid inflow into Sierra Leone is imperative for economic growth in Sierra Leone. The study further found that gross capital formation and labour force impact significantly on economic growth whereas, foreign direct investment impacts negatively and insignificantly on economic growth. The study further found that there is no causality between foreign aid and economic growth in Sierra Leone within the period under review. Based on the findings from this study, it is recommended that vigorous effort should be made by government to create a stable economic and political environment and effective competitive policies. This work has tried to emphasize that aid programmes should be broadly consistent with a strategy aimed at developing human capital. In the absence of foreign aid, there is no doubt that the height of development in human capital in Sierra Leone would be even lesser than that prevailing. This work recommends that foreign aid could be better prioritized in the following ways; In order to lessen the extreme disparity that exists in Sierra Leone, foreign aid must be directed more specifically at individuals living in the poorest areas of the nation. The rate of school dropouts will decrease with less disparity, notably in Sierra Leone. Additionally, recent studies show that nations with less inequality have a higher likelihood of improving their literacy rates as a result of foreign help. Therefore, there should be more foreign aid programs launched in each of Sierra Leone four geopolitical zones.

VL  - 13
IS  - 3
ER  -

Copy | Download

Author Information

Moses Balla Marah

Institute of Public Administration and Management, University of Sierra Leone, Freetown, Sierra Leone

Contact Email
Saidu Kallah Fofanah

Institute of Public Administration and Management, University of Sierra Leone, Freetown, Sierra Leone

Contact Email
Saidu Kargbo

Department of Banking and Finance, Licssal Business College, Freetown, Sierra Leone

Contact Email

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Marah, M. B., Fofanah, S. K., Kargbo, S. (2025). The Nuex Between Foreign Aid and Economic Growth in Sierra Leeone (1994 -2024). International Journal of Economics, Finance and Management Sciences, 13(3), 70-83. https://doi.org/10.11648/j.ijefm.20251303.11

Copy | Download

ACS Style

Marah, M. B.; Fofanah, S. K.; Kargbo, S. The Nuex Between Foreign Aid and Economic Growth in Sierra Leeone (1994 -2024). Int. J. Econ. Finance Manag. Sci. 2025, 13(3), 70-83. doi: 10.11648/j.ijefm.20251303.11

Copy | Download

AMA Style

Marah MB, Fofanah SK, Kargbo S. The Nuex Between Foreign Aid and Economic Growth in Sierra Leeone (1994 -2024). Int J Econ Finance Manag Sci. 2025;13(3):70-83. doi: 10.11648/j.ijefm.20251303.11

Copy | Download

@article{10.11648/j.ijefm.20251303.11,
  author = {Moses Balla Marah and Saidu Kallah Fofanah and Saidu Kargbo},
  title = {The Nuex Between Foreign Aid and Economic Growth in Sierra Leeone (1994 -2024)
},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {13},
  number = {3},
  pages = {70-83},
  doi = {10.11648/j.ijefm.20251303.11},
  url = {https://doi.org/10.11648/j.ijefm.20251303.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20251303.11},
  abstract = {This study investigated the relationship between foreign aid and economic growth in Sierra Leone using annual data from 1994 to 2024. Specifically, the study first, estimated the impact of foreign aid on economic growth; and second, the study investigated the direction of causality between foreign aid and economic growth in Sierra Leone. The ordinary least square estimation technique was used for analysis. The empirical findings suggest that foreign aid inflow into Sierra Leone is imperative for economic growth in Sierra Leone. The study further found that gross capital formation and labour force impact significantly on economic growth whereas, foreign direct investment impacts negatively and insignificantly on economic growth. The study further found that there is no causality between foreign aid and economic growth in Sierra Leone within the period under review. Based on the findings from this study, it is recommended that vigorous effort should be made by government to create a stable economic and political environment and effective competitive policies. This work has tried to emphasize that aid programmes should be broadly consistent with a strategy aimed at developing human capital. In the absence of foreign aid, there is no doubt that the height of development in human capital in Sierra Leone would be even lesser than that prevailing. This work recommends that foreign aid could be better prioritized in the following ways; In order to lessen the extreme disparity that exists in Sierra Leone, foreign aid must be directed more specifically at individuals living in the poorest areas of the nation. The rate of school dropouts will decrease with less disparity, notably in Sierra Leone. Additionally, recent studies show that nations with less inequality have a higher likelihood of improving their literacy rates as a result of foreign help. Therefore, there should be more foreign aid programs launched in each of Sierra Leone four geopolitical zones.
},
 year = {2025}
}

Copy | Download

TY  - JOUR
T1  - The Nuex Between Foreign Aid and Economic Growth in Sierra Leeone (1994 -2024)

AU  - Moses Balla Marah
AU  - Saidu Kallah Fofanah
AU  - Saidu Kargbo
Y1  - 2025/05/09
PY  - 2025
N1  - https://doi.org/10.11648/j.ijefm.20251303.11
DO  - 10.11648/j.ijefm.20251303.11
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 70
EP  - 83
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20251303.11
AB  - This study investigated the relationship between foreign aid and economic growth in Sierra Leone using annual data from 1994 to 2024. Specifically, the study first, estimated the impact of foreign aid on economic growth; and second, the study investigated the direction of causality between foreign aid and economic growth in Sierra Leone. The ordinary least square estimation technique was used for analysis. The empirical findings suggest that foreign aid inflow into Sierra Leone is imperative for economic growth in Sierra Leone. The study further found that gross capital formation and labour force impact significantly on economic growth whereas, foreign direct investment impacts negatively and insignificantly on economic growth. The study further found that there is no causality between foreign aid and economic growth in Sierra Leone within the period under review. Based on the findings from this study, it is recommended that vigorous effort should be made by government to create a stable economic and political environment and effective competitive policies. This work has tried to emphasize that aid programmes should be broadly consistent with a strategy aimed at developing human capital. In the absence of foreign aid, there is no doubt that the height of development in human capital in Sierra Leone would be even lesser than that prevailing. This work recommends that foreign aid could be better prioritized in the following ways; In order to lessen the extreme disparity that exists in Sierra Leone, foreign aid must be directed more specifically at individuals living in the poorest areas of the nation. The rate of school dropouts will decrease with less disparity, notably in Sierra Leone. Additionally, recent studies show that nations with less inequality have a higher likelihood of improving their literacy rates as a result of foreign help. Therefore, there should be more foreign aid programs launched in each of Sierra Leone four geopolitical zones.

VL  - 13
IS  - 3
ER  -

Copy | Download