Human capital, foreign aid and poverty reduction strategy in Chad

• Main Author: Moussa Kaya, Khalil Abakar
• Format: Thesis
• Language: English; English; English
• Published: 2021
• Subjects: HF Commerce; T Technology (General)
• Online Access: http://eprints.uthm.edu.my/4802/1/24p%20KHALIL%20ABAKAR%20MOUSSA%20KAYA.pdf; http://eprints.uthm.edu.my/4802/2/KHALIL%20ABAKAR%20MOUSSA%20KAYA%20COPYRIGHT%20DECLARATION.pdf; http://eprints.uthm.edu.my/4802/3/KHALIL%20ABAKAR%20MOUSSA%20KAYA%20WATERMARK.pdf; http://eprints.uthm.edu.my/4802/

Poverty is a worldwide phenomenon that affects continents, countries, and people differently in both urban and rural areas. Although the International Development Assistance (IDA) or also known as foreign aid (FA) has been supporting poverty reduction around the world, particularly in Sub-Saharan Africa (SSA) countries for more than five decades. However, the issues of poverty remained unsolved in many poor nations. Therefore, this study investigated the mediating role of foreign aid in the relationship between human capital (i.e., education, health, and vocational training) and poverty reduction in Chad. Thus, the human capital theory was integrated as the underpinning theory to support the fundamental conceptual framework of the study. As such, a mixed methods design (qualitative and quantitative) was used including secondary data collected from the World Bank to confirm the findings from both analyses. A total of 354 survey questionnaires were collected from the community leaders, members of independent associations and non-governmental organizations (NGO) representatives in Chad and therefore, time series data gathered from the World Bank database from 1991 to 2019. Therefore, the results from the semi-structured interviews (qualitative) showed that poverty reduction strategy in Chad is insufficient and unsatisfactory. In addition, participants agreed that education, health and vocational training strongly influence the poverty reduction strategy. The quantitative analysis from the secondary data revealed that only vocational training positively correlates with poverty reduction. However, health and education indicate a significant negative relationship with poverty reduction. Furthermore, the Partial Least Squares Structural Equation Modeling (PLS-SEM) analysis on the other hand revealed that there is a significant positive relationship between education, vocational training and poverty reduction in Chad. Also, the results indicated that foreign aid mediates the relationship between education, vocational training and poverty reduction. But health has shown a negative effect on poverty reduction directly and indirectly through foreign aid. The study has confirmed that human capital indicators play a vital role in reducing poverty and therefore, foreign aid plays a role that not to be neglected in poverty reduction in Chad. Thus, it is recommended that Chadian government to enhance more on the management of the foreign aid given to the health sector by evaluating the impact of the aids after the execution process. Through this, poverty reduction can be improved, leading to a positive and significant effect on overall poverty reduction plan in Chad. Also, the results add to the existing literature by incorporating variables that might improve poverty reduction. The research also addressed the implication of practices and future research.