Foreign aid inflows in Nigeria have grown significantly in the independence period. Many studies have tried to examine the effectiveness of aid on the socio- economic development. While some evaluations have found that in many cases aid does not ‘work,’ others are ambiguous. This paper assesses the factors for the low impact of foreign aid on socio- economic development of Nigeria, 1960-1985. The result strongly supports the view that foreign aid had but a minimal impact on socio-economic development of the country during the period under study. This was so due to a series of factors highlighted and discussed in the study.