The Impact of Foreign Aid and Agriculture, Forestry and Fishing on Economic Growth: The case of D. R. Congo

This thesis investigates the impact of foreign aid and agriculture, forestry and fishing (AFF) on economic growth in the Democratic Republic of the Congo using data from the World Bank for the timespan 1972 to 2021. To underline the importance of the chosen macroeconomic variables in strengthening economic growth, the impact of the consumer price index; Exports of goods and services; foreign direct investment on the economic growth is also present. The probe utilized the Augmented DickeyFuller and Phillips-Perron unit root tests to assess data stationarity through first differencing, at 10% significance level. Long-term relationships between variables were examined using Johansen's cointegration test, while short-term and long-term relationships were assessed using the Vector Error Correction Model (VECM). The causal directionality between macroeconomic indicators and economic growth through Granger causality test was explored lastly. The outcomes of the VECM analysis underscore several key trends in the D. R. Congo's economic landscape. The findings reveal an adverse long-term correlation betwixt CPI, EXPO, and GDP; indicate a favorable enduring connection among AID, AFF, and GDP. Lastly, the analysis establishes the absence of a statistically substantial relationship between FDI and GDP in the country. It concluded that AID and AFF have been prominent for economic growth. The findings offer valuable insights for policymakers, to make informed decisions that enhance the nation's economy through the positive interplay of AID, AFF and economic growth.