Abstract
This study investigates the effect of Official Development Assistance (ODA) on poverty reduction
in 48 Sub-Saharan African countries from 2004 to 2024. Using a longitudinal research design and
secondary panel data from the World Bank, UNDP, and AfDB, the study employs the System
Generalized Method of Moments (System GMM) to account for endogeneity and country-specific
heterogeneity. Poverty, measured by the headcount ratio, serves as the dependent variable, while
ODA inflows, GDP per capita, inflation, and trade openness are included as explanatory
variables. The results reveal that ODA significantly reduces poverty, with its effectiveness
enhanced in countries with stronger economic performance. Lagged poverty, inflation, and trade
openness also influence poverty levels, highlighting the importance of macroeconomic stability
and policy interventions in complementing foreign aid. The findings conclude that while ODA is a
key tool for alleviating poverty in Sub-Saharan Africa, its impact is contingent upon domestic
economic management and institutional quality. The study recommends efficient targeting of aid,
strengthening governance, fostering economic growth, and integrating trade policies to maximize
the poverty-reducing benefits of ODA.