The Impact of Foreign Aid in East Africa: Case Study of Kenya, 2000-2016

Abstract

Foreign aid continues to support economic development in developing nations. In East Africa, Kenya has continued to receive foreign aid. The main objective of this study was to assess the impact of foreign aid on Kenya‟s economic development. The study specifically investigated the types, intended purpose and major trends in foreign aid received in Kenya between 2001 and 2016. The study also examined the state and performance of Kenya with foreign aid between 2001 and 2016. In addition, the study assessed the major challenges and controversies associated with aid administration in Kenya. The study used both qualitative and quantitative data collection, data processing and presentation techniques. The findings revealed that Kenya has recorded increase in foreign aid in various forms for different for economic growth, social and political system improvement. The study also established that donor funds have been on the upward trend. The increased donor funds in many sectors in Kenya have improved many outcomes including positive economic growth, good governance systems, improved health care indicators, increased enrollment and learning outcomes in education as well as sound environmental management practices. Moreover, the study established that that foreign aid in Kenya is managed by both government and non-governmental institutions that have continued to register successes and failures in the management of foreign aid. This chapter has also demonstrated that while there have been significant successes of foreign aid, challenges related to foreign aid limit the success registered. The challenges of foreign aid are both institutional and systemic. Also, the challenges of foreign aid are not only local but also international. In this regard, attempts of managing the challenges have been put in place but it seems that more time is required to address all the challenges. In view of the findings, the study concludes that foreign aid is necessary to Kenya‟s development yet the challenges resulting from the utilization of the aid are significant with adverse effects on the purpose of the aid. The study recommends that alternative means of improving revenues and management of should be explored to reduce dependence on foreign aid.