Impact of World Bank Financial Support on Nigeria’s Human Development

Abstract

This study empirically examines the impact of World Bank financial support on Nigeria’s human development over the period 1990-2018 with time series data sourced from World Bank Outlook 2018. The TY augmented causal test was adopted. The results show that World Bank financial support to agriculture and World Bank financial support to industry in the model jointly have unidirectional causal effect on economic development proxy by human development index, and therefore, that the World Bank financial support has significantly led to economic development in Nigeria. Also, the World Bank finance on Agriculture has a significant effect on economic development in Nigeria and its financial aid to the service sector has no significant causal relationship with human development in Nigeria. By implication, the impact of this assistance on human development and by extension the welfare of Nigerians has not yielded the expected result of achieving human development. Majority of these funds are diverted for personal and political purposes order than the purpose for which the grants, aid or credit are given. This study recommends that World Bank financial support as a source of foreign aid should not be done in isolation if it must impact on the performance of agricultural and service sectors of the economy. Therefore it becomes absolutely necessary to improve rapidly on domestic investment and human capital skill.