Unfortunately, evidence indicates that foreign aid has been ineffective in eradicating poverty and that it has indeed contributed to even more challenges for recipient countries. Aid failure in Africa has been researched and documented extensively.
Karabegovic and McMahon (2006) assert that foreign aid is inconsequential in the promotion of economic development in Africa. Foreign aid fails to increase investments in third world African countries and without a substantial increase; poverty levels stagnate or even rise. In fact, the outcome of foreign aid is the formation of large governments and institutions, which affect economic development negatively. The Increase of government officials is often accompanied by heightened levels of corruption brought about by misappropriation of foreign aid and other fraudulent activities. More often than not, foreign aid is misspent and even though at times it can be used diligently, it fails to provide long-term solutions for poverty eradication. This is so because, most of the projects initiated by donor funding are used to benefit the recipients for a short while due to existing conditions from donor countries.