Effective Capital Development and Productivity Growth in Nigeria (1985 – 2020)

Abstract

The study examined human capital development and productivity growth in Nigeria from 1985 to 2020. Therefore, the broad objective of the study was to examine the impact of human capital development on productivity growth in Nigeria. The study made use of annual time series data from 1985 to 2020. The econometric methods of Granger causality test, autoregressive distributed lag bound (ARDL) co-integration test and the ARDL error correction mechanism were employed as the analytical technique. The granger causality test revealed the existence of a uni-directional causality between productivity growth and human capital development and not the reverse. The co-integration test revealed the existence of a long-run relationship between human capital development and productivity growth in Nigeria. The ARDL error correction mechanism revealed that life expectancy at birth, total government expenditure on education, total government expenditure on health, secondary school enrolment and tertiary school enrolment were significant. However, only primary school enrolment was the variable not significant. The study concluded that life expectancy at birth, total government expenditure on education, total government expenditure on health, secondary school enrolment and tertiary school enrolment have significant impact on productivity growth in Nigeria from 1985 to 2020. The study recommended for concerted and sincere efforts by government and policy markers in building and developing human capacity through adequate educational funding across all levels.