Analysis of the role of foreign donor aid in Ghana's economic development and povery alleviation

Abstract

This study sought to analyse the role of foreign aid in poverty alleviation and economic development of Ghana from 1957 to 2008. Literature related to the study on foreign aid and economic development was reviewed to get an insight into the views of other writers on the topic under study. The study adopted both primary and secondary sources of data to examine the concept of foreign aid, poverty reduction and economic development in Ghana. The study collected data using qualitative interviews consisting of open- and close-ended questions from the field. Content analysis involving the use of existing materials by researchers and the analyses of data originally collected by others was also relied on as a complement to the primary sources in the study. The study found that donor aid is not well coordinated in Ghana because of the proliferation of donor agencies in the country. Though aid is provided to the Ghanaian economy to address poverty and economic development challenges, the study found that foreign aid did not achieve the set objectives because of poor management of donor resources. This study, therefore, recommends that the informal economy should be promoted with funding from microfinance as an alternative to donor-driven development to effectively harness the natural resources in the country for development.