Muhammad Abdulaziz Muhammad, Maryam Ahmad
The move towards financing of health and education to meet the Millennium Development Goals (MDGs), agreed in September 2000 at the UN Millennium Summit in New York, became the new global priority. The uncertainty of whether an aid will deliver results brought about the current strategy of disbursing funds directly to governments in LDCs. The goals behind foreign aid has undergone something of a shift, in its quantities and the way it is spent, since early 2000s. This study examine whether foreign aid for health affects the health outcomes in Nigeria and whether other factors, such as the level of transparency of the institutions, are important determinants of health outcomes in the Country. The study used ARDL econometric model to assess the said pattern of relationship and roles. The study findings indicated that foreign aid for health improve health outcomes in Nigeria in both short and long run. It also found that key governance indicators such as, Government Effectiveness, Control of Corruption, Accountability and Voice, Rule of Law, quality of regulation, play a vital role in improving the health outcome of under-five mortality as they tend to reduce it. Furthermore, the study recommends that: Donor agencies should direct health aid to specific health target like reducing under-five mortality rate than taking several health issues at a go. Government at all levels should uphold virtues of good governance as it affects the effectiveness of health aids directed to the country’s health sector by donor agencies.