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Academic Paper from the year 2021 in the subject Economics - Finance, grade: 3.67, SIMAD University (SIMAD University), course: Economic and Social Science, language: English, abstract: The inflows of foreign debt and foreign aid in the post-war period had grown significantly in developing and underdeveloped countries, and Somalia is no exception. For several decades Somalia has been receiving foreign capital by debt or by aid. The study sought to find out to what extent do foreign debt and foreign aid have an impact on economic growth in Somalia. The Ordinary Least Square (OLS) method was used. The result was that foreign debt has an insignificant effect on economic growth, while foreign aid has a positive significant effect on economic growth, which indicates an increase in foreign aid will cause an increase in economic growth. The study identifies many obstacles Somalia faces when it comes to the utilization of foreign funds. The study concludes by proposing several recommendations to counter these obstacles.
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