Official Development Assistance and Poverty Dynamics in Ecowas Countries: A Dynamic Panel Data Approach

Abstract

This paper examines the effect of Official Development Assistance (ODA) on poverty dynamic in ECOWAS countries from 2000 to 2024. Using an ex post facto research design and secondary panel data, the study applies the dynamic panel Generalized Method of Moments (GMM) estimator to address potential endogeneity, heteroskedasticity, and autocorrelation.   The results reveal that higher ODA inflows are significantly associated with increased poverty levels, suggesting that aid has not effectively translated into improved welfare within the region. Conversely, economic growth and foreign direct investment (FDI) exert significant poverty-reducing effects, while inflation remains insignificant. These findings imply that the success of ODA in alleviating poverty depends largely on governance quality, institutional capacity, and sectoral targeting. The study concludes that transparent and accountable allocation of aid to productive sectors such as education, health, agriculture, and infrastructure is essential for transforming ODA into a tool for sustainable poverty reduction in ECOWAS countries.