Dynamics of Human Capital Development and Economic Growth in Nigeria

Abstract

This paper investigates the dynamics of human capital development and economic growth in Nigeria using time series data spanning from 1981 to 2022. The major sources of the data were from the World Development Index (WDI) and Central Bank of Nigeria (CBN) statistical bulletin various issues. The macroeconomic variables selected were Gross Domestic Product (GDP) as a proxy for economic growth, government expenditure on education (GEE), government expenditure on health (GEH), tertiary school enrolment (TSE) and gross capital formation (GCF). The paper engages the technique of Vector Error Correction Model (VECM) and the result indicates that expenditure on education and tertiary enrolment were positively related to economic growth while expenditure on health and gross capital formation exert negative though significant in the short run. The implication of the above findings suggests that human capital development has not been well attended to in the case of Nigerian economy and thus causing human capital to impact insignificantly on per capital income. Based on the above findings, the paper recommends that government should increase its revenue allocation to the development of human capital through education, tertiary enrolment, health and gross capital formation. More so, government should guarantee that expenditure on education in all levels is paramount in ensuring inclusive growth in Nigeria.