Foreign Aid's Role in Somali Agriculture: A Detailed Empirical Study

Abstract

Somalia is one of the countries where political instability and poor infrastructure have led to a decline in agricultural production, prompting foreign aid donors to encourage overall development and agricultural production. Our study focuses on the effect of foreign aid on crop production in Somalia, employing the ARDL model to analyze time-series data from 1985 to 2022. The study found that the development of food aid negatively affects crop production due to its timing and dependency but shows an insignificant effect in the short run. Humanitarian aid shows no significant effect in either the long or the short run. Climate change variables showed an immediate and long-run effect on crop production, with rainfall indicating a positive effect and temperature negatively affecting crop production. This study recommends better timing management of aid, improved water management, and effective utilization of rainfall.