IMPACT OF FOREIGN AID ON ECONOMIC GROWTH IN KENYA 2006-2020

Abstract

Purpose: The objective of this study was to examine the impact of foreign aid on economic growth in Kenya. Methodology: The study used a descriptive research technique and a time series approach to track economic growth in Kenya for 41 years, from the year 1980 to 2020. The study also adopted a census survey to collect secondary data by use of a secondary time series data template from the World Bank and KNBS databases in Kenya for the period 1980 to 2020.  The collected data was edited,  coded  and  analyzed  using  statistical  package  for  social  sciences  (SPSS). Findings: The results of the study revealed that ODA, emergency & food aid, debt forgiveness and technical cooperation had a positive and significant relationship with economic growth(GDP). In addition, ODA, emergency & food aid and  debt forgiveness have a positive and significant impact on economic growth. However, technical cooperation had a negative and no significant impact on economic growth in Kenya Unique Contribution to Theory, Practice and Policy: The study recommended that financial policymakers should come up with better strategies on the management of the foreign aid funds so as to ensure they are efficiently utilized. Financial policy makers should also consider foreign donors who can offer debt forgiveness aid since it will help Kenya in managing and reducing its debts.