AN INVESTIGATION INTO THE IMPACT OF AID ON ECONOMIC GROWTH OF FORMER CENTRAL AFRICA FEDERATION

After 55 years of independence, Malawi, Zambia and Zimbabwe are still striving to unchain economic barriers to financial independence. Malawi’s 40% of budget comes from external sources, Zimbabwean dollar has been dominated and devalued several times which has led to severe problems like hyperinflation, Zambia on the other hand has been struggling to pay back its endless debts for a couple of years (World Bank, 2018). Aid has been in the forefront to rescue these countries and to assist them to their economic development. For a decade on World Bank reports, the ranking of these countries has not improved, Malawi ranks the lowest among the GDP per Capita, recently making it the fourth poorest country in the World. A lot of labels have been put on Malawi because of its poor ranking on different indices, like the unhappy country in the World. The three countries have been making headlines on different corruptions scandals despite the public financial programs emphasized by the Organization of the Economic Cooperation and Development OECD (2018). Now, the question is the Official Assistant significant on the growth of economies of these countries? Are the recipient countries the problem or donor strategies? This research was conducted to find the significance of aid one economic growth of Malawi, Zambia and Zimbabwe. The research used both qualitative and quantitative data for the purpose of triangulation. A linear regression model was used as a research tool to find the relationship between economic growth and aid. The paper also makes a few recommendations to donors and recipient countries on new ways to distribute aid and how to improve its effectiveness.