Impact of foreign aid on Nigerian economy

Figures & data

Figure 1. Nigeria’s GDP at current US $. Source: World Bank (2019).

Figure 2. Net Official Development Assistance (ODA). Source: World Bank (2019).

Table 1. Descriptive statistics test results.

	Mean	Std. dev	Min	Max	Obs.
GDP	0.539752	5.257504	15.45036	12.45747	40
ODA	8.540179	14.43239	0.379475	80.20272	40
LLF	1.025871	0.011806	1.003958	1.047950	40
LGCF	10.61762	0.288948	10.09155	11.16735	40

Source: Authors’ computation (2023).

Table 2. Results of unit root test.

	ADF
Variables	Level	First difference	Stationarity status
GDP	−0.8544*	−3.632900***	I(0)
ODA	−2.938987**	−3.621023***	I(0)
LLF	−2.621007	−2.941145**	I(1)
LGCF	−2.621007	−2.941145**	I(1)

Notes: Lag lengths are selected based on the Akaike Information Criterion (AIC). The test statistics are compared with critical values from MacKinnon (1996); ***, ** and * denote significance at 1%, 5% and 10%, respectively.

Table 3. Results of bounds test.

Dependent variables	Function	F statistics
LGDP	f (GDP/ODA, LLF, LGCF)	10.44613***
Critical value bounds
10%	5% 2.5%	1%
I(0) I(1)	I(0) I(1) I(1) I(0)	I(1) I(0)
2.37 3.2	2.79 3.67 4.08 3.15	4.66 3.65

Source: Authors’ computation (2023).

***Denotes statistical significance at 1% level.

Table 4. Results of short run model.

Panel A: short-run coefficients – dependent variable is GDP
Regressor	Coefficient	Standard error	T-statistics	Prob
$\Delta$ (LGCF)	−793.3589	104.0013	−7.628356	0.0000
CointEq(−1)*	−0.812403	0.106161	−7.652558	0.0000

Source: Authors’ computation (2023). Δ is the first difference operator.

*Denotes lagged variable in the previous time period.

Table 5. Results of long run model.

Panel B: long-run coefficients – dependent variable is GDP
Regressor	Coefficient	Standard error	T-ratio	Prob
NODAP	−0.012946	0.058873	−0.219892	0.8273
LLF	2.438618	5647.371	4.318148	0.0001
LGCF	−1.003467	231.0325	−4.343401	0.0001
C	−1.436226	3340.672	−4.299214	0.0001

Source: Authors’ computation (2023).

Table 6. Results of diagnostic tests.

Test statistic	Results
Serial correlation: CHSQ(2,31)	0.781792 [0.4664]
Functional form: reset F-stat (1,32)	0.007471[0.9317]
Normality: Jarque-Bera	0.600391[0.740673]
Heteroscedasticity: CHSQ(5,33)	1.408025[0.2470]

Source: Authors’ computation (2023).

Figure 3. Plot of the cumulative sum of recursive residuals.

Figure 4. Plots of the cumulative sum of recursive residuals.

Table 7. Results of Granger causality.

Null hypothesis	lags	Chi sq	Prob	Conclusion
NODAP does not cause GDP	1	0.39379	0.5343	Accept null hypothesis
GDP does not cause NODAP	1	1.22975	0.2748	Accept null hypothesis

Source: Authors’ computation (2023).

World Bank. (2019). Global report on food crises 2019. https://www.wfp.org/publications/2019-global-report-food-crises

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MacKinnon, J. G. (1996). Numerical distribution functions for unit root and cointegration tests. Journal of Applied Econometrics, 11(6), 601–618.

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