ADSU International Journal of Applied Economics, Finance and Management

Impact Of Human Capital Development On The Performance Of Nigerian Economy

Abstract

This study examines the impact of human capital development on the performance of Nigerian economy. The study utilised annual time series data sourced from World Bank, World Development Indicator and Index Mundi 2024 respectively. The major objective of this study is to examine the impact of human capital development on the performance of Nigerian economy. The study utilized Auto regressive distributed Lag Model (ARDL) to analyse the data from 2004 to 2021. The ARDL bound test for cointegration revealed that there is a long run relationship among the variables. The findings shows that human capital development indicators had positive impact on the performance of Nigerian economy and statistically significant at 5% level. The coefficient of human capital development (HCD) is negative and statistically significant at 5% level within the reviewed periods. The coefficient of labour force (LAB) is positive and statistically significant at 5% level. The coefficient of trade openness (TOP) is negative and statistically significant at 5% level. The coefficient of population (POP) is positive and statistically significant at 5% level. The Error Correction Term (ECT-1) confirms that there is a long run relationship among the variables. Coefficient of the ECT-1 show that 94% of the short run deviation from the long run equilibrium of the variables utilised for the study is corrected each year until they attain the long run equilibrium. The study recommends that government should invest more in human capital development and endeavours to prioritize the health and education sectors budgeting considering their growth driving potential in Nigeria. Similarly, government can as well make a deliberate policy that will create the atmosphere for investment and employment for economic growth in Nigeria.