AID FLOW AND POVERTY REDUCTION IN OUR ECONOMY TODAY
Aid is directed at filling the gaps of scarce resources that the economy could not access in directing the couse of its development. Now, there is a yawning gap between the industralized economies and the less industrialized economies with the bulk of those living in poverty. Many industrialized countries have offered to leverage the pace of development of less developed economies under the aegis of aid.
Beyond export earnings and private foreign direct and portfolio investment, public bilateral development assistance provided by non governmental organization do form activities that constitude foreign aid. Foreign aid essentially is any flow of capital channeled to developing countries towards attaining two principal criteria which are; first, devoid of commercial transactions from the perspective of the donor and secondly, must be characterized by concessional terms.
The actual development assistance flows have conceptual problems like the calculation and measurement. The issue of the effect of aid has been pervasive and fraught with disagreement (Cassen,1986). The facts hold that official aid instead of bridging the gaps in living conditions between those in affluence and the poor are widened.
Despite the prevalence of foreign aidto curtail unemployment,balance of payment, government deficit, problems that ought to be addressed towards addressing resource generaation to curb the menance of poverty, the sutuation has rather been dampened with underdevelopment in some countries.
A country ought to undertake an inventory of its basic needs and the basic philosophy and principles of the aid before embarking on aid related intervention programmes. Aid flows into countries have been accommodated with less restriction over time. Aid is directed in filling resouce gaps in developing countries but the extent of its implementation calls for a critical rethink before accepting any aid
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