The Dynamics of Foreign Aid and The Dependency Theory: The Nigeria's Experience

Abstract

This paper is a theoretical enquiry of the relationship between foreign aid and the dependency theory in Africa, and in particular, Nigeria. Dependency theory comprises of two sets of states described as dominant/dependent, centre/periphery, metropolitan/satellite. The dominant or core states are the developed states in the Organization of Economic Cooperation and Development (OECD) while the dependent states are those of Latin America, Asia and Africa. Dependency Theory is often associated with underdevelopment. The theory is predicated on the concept that reserves flow from a 'periphery' of poor and underdeveloped country to a 'core' of wealthy country. Most African scholars uphold the view that underdevelopment of Africa emanates from the forceful integration of Africa into the world capitalist system through the Trans-Atlantic Slave Trade, Produce trade, colonialism, imperialism and neo-colonialism. These theorists are of the notion that foreign aid, among several factors, is a key instigator of the underdevelopment of Africa. Analysts are of the view that foreign aid isn't working in Africa compared to the negligible percent of countries that are making progress. Statistics show that countries like Uganda, Ghana, Mozambique, Tanzania, Mali, Rwanda are making steady progress whereas the story is appalling in many others. No doubt, foreign aid has helped critical areas in infrastructure, education and healthcare in Nigeria but a whole lot of it never gets utilized for the purpose for which it was intended. Some argue that aid is not working in Nigeria and should be discontinued while others opined that the argument should be targeted on how to make it work in Nigeria. This work concludes that foreign aid is not solely capable of inducing the needed transformation in Nigeria because real change would only take place when the bulk of contribution comes within Nigerian and not externals. Internal factors, especially bad governance, corruption, conflicts and inter-ethnic rivalry in Nigeria, still play a big role in the underdevelopment of Nigeria and not all about foreign aid and dependency.

Keywords: Dependency Theory, Foreign Aid, Underdevelopment, Periphery, Core.