Economic Resilience and Foreign Development Aid: Lessons from Sub-Saharan Africa

Abstract

AbstractThe main goal of this chapter is to provide an overview of the role of foreign development aid in advancing the economic and social welfare of sub-Saharan African countries. The development aid and donations are described as the main economic stabilizers and growth engines in sub-Saharan Africa over the last 50 years. The empirical analysis in this chapter employs the predictive machine learning (ML) models and utilizes the powerful ML algorithms family to measure the impact of foreign development aid on main socioeconomic indicators of 48 African countries between 2000 and 2020. The results in this chapter reveal that African countries are still dependent on denotations and foreign aid in promoting economic growth and in subsidizing health and education sectors. These outcomes suggest that the African countries need to adapt comprehensive strategies to reform their economies and institutions in order to reap the utmost benefits from foreign aid and donations. The outcomes of this study will also help in understanding and prognosticating the resilience of African economies to potential decrease in foreign development aid flows in future.KeywordsEconomic resilienceAfrican countriesMachine learningForeign aid