DEBUNKING THE MYTH OF AID: YOKED WITH DE-INDUSTRIALIZATION?

This research paper centers on the Aid-Growth nexus in the context of Sub-Saharan Africa post 1980. Moreover, it attempts to show whether there is a link between ODA and negative growth impacts (de-industrialization) by putting in place economic structures which negatively affect the industrial dynamic of the sub-continent. Hence, within the Aid paradigm, it exclusively focuses on trade liberalization, being one of the widely applied conditionalities of the post 1980 period, as a pre-requisite to ODA. It is the contention of the paper that ODA has not been geared towards fostering manufacturing growth, is severely skewed towards social sector spending and to the extent that SSA are dependent on Aid flows and that trade liberalization within the context of immature industries as are rampant in the subcontinent has not been as growth enhancing as stipulated by free market/free trade enthusiasts. This ought to be a cause of serious concern as a declining manufacturing sector could spell perpetual dependence on foreign assistance by virtue of manufacturing's intrinsic capability to spawn long-run productivity gains via increasing dynamic returns. It appears that there is a trade off between sustainable long term growth and short term gain in terms of ODA. Thus, SSA economies ought to carefully re-think the Aid model.