Impact of Human Capital Development on Per Capita Income in Nigeria
Keywords:
Human, Capital, Development, Income, EconomiesAbstract
This study used time-series data from 1986 to 2025, sourced from the Central Bank of Nigeria Statistical Bulletin, the National Bureau of Statistics Bulletin, and the United Nations Development Program Report, to examine the impact of human capital development on per capita income. The study adopted E-Views for statistical analysis and used the Augmented Dickey-Fuller unit root test to assess the stationarity of the series. The bounds testing approach to cointegration was used to establish the long-run relationship between the variables, while the Error Correction Mechanism was used to determine the speed of adjustment to long-run equilibrium. Economic growth was proxy by per capita income (PCI); human capital development was proxy by government capital expenditure on education (GCXE), on health (GCXH), and on research and development (GCXRD). The study indicated that government capital expenditure on health and education was statistically significant in both the short and long run, while research and development was statistically insignificant in both periods. It was concluded that human capital development has a positive impact on economic development in both the short and long run, and that there is a long-run relationship between human capital development and economic performance. The study recommended, among others, that the government increase budgetary allocations to education, health, and research and development.
References
Adebiyi, M. A. (2006). Public education expenditure and defense spending in Nigeria: An empirical investigation. Journal of Science and Technology Education Research, 2(3), 62–74.
Adelakun, O. J. (2011). Human capital development and economic growth in Nigeria. European Journal of Business and Management, 3(4), 28–38.
Aigbokhan, B. O., Imahe, E., & Ailemen, M. I. (2017). Education expenditure and human capital development in Nigeria: Any correlation so far. International Journal of Social Sciences and Humanities, 2(7), 425–439.
Akunede, M. C., Nzeribe, G. E., & Ezenekwe, U. R. (2022). Human capital development in Nigeria: Determinants and challenges. International Journal of Research and Innovation in Social Sciences, 6(10), 465–476.
Aluko, Y. A., & Aluko, O. (2012). Human capital development: Nigeria’s greatest challenge. Journal of Management Policy and Practice, 13(1), 162–177.
Amassoma, D., & Nwosa, P. I. (2018). Investment in human capital and economic growth in Nigeria: A causality approach. Canadian Journal of Social Research, 7(4), 114–120.
Anyanwu, S. O., Adam, J. A., Obi, B., & Yelwa, M. (2015). Human capital development and economic growth in Nigeria. Journal of Economics and Sustainable Development, 6(14), 16–26.
Business Day. (2025, January 13). Why Nigeria’s 7% education budget fails the test. Business Day. https://businessday.ng/editorial/article/why-nigeria-7-education-budget-fails-the-test/
Central Bank of Nigeria. (2023). Quarterly statistical bulletin, 12(4).
Central Bank of Nigeria. (2024). Quarterly statistical bulletin.
Central Bank of Nigeria. (2025). Macroeconomic indicators: Providing empirical data for sound policy formulation. https://www.cbn.gov.ng/rates/Macroindicators.html
Coe, D. T., Helpman, E., & Hoffmaister, A. W. (2009). International research and development spillovers and institutions. European Economic Review, 53(7), 723–741. https://doi.org/10.1016/j.euroecorev.2009.02.005
Daasi, L. K. G. (2023). Education and health expenditures in Nigeria: Implications for sustainable development goals. Academic Practitioners Research for Sustainable Development Goals in Africa. https://www.researchgate.net/publication/374618537
Ebhosa, F. (2025). Nigeria gross domestic product per capita trend, 1960–2025: Chart analysis and forecast. Finance in Africa. https://financeinafrica.com/guide/nigeria-gdp-per-capita-trend/
Egbaseimokumo, O. P. (2025). Determinants of human capital development in Nigeria. International Journal of Research and Innovation in Social Science, 9(8), 4405–4417. https://doi.org/10.47772/IJRISS.2025.908000352
Eniekezmene, F. A., Wodu, E., & Anda-Owei, J. P. (2023). Human capital development and economic growth: Evidence from Nigeria. Asian Journal of Economics, Business and Accounting, 23(21), 96–110.
Entekhabi, M. (2023). Human capital in developing countries: Common challenges and the way forward. Journal of Emerging Trend in Marketing and Management, 1(2), 18–29.
Euphemia, L. B. I. (2022). Human capital development and economic growth in Nigeria. Asian Journal of Economics, Finance and Management, 8(1), 1–11.
Fitzsimons, P. (1999). Human capital theory and education. In The encyclopedia of education. Macmillan.
Frank, R. H., & Bernanke, B. S. (2007). Principles of microeconomics (3rd ed.). McGraw-Hill/Irwin.
Hall, M. (2024). How does gross domestic product affect the standard of living? Investopedia. https://www.investopedia.com/
Harbison, F. H. (1971). Human resources planning in developing economies. International Labour Review, 103(1), 1–16.
India Data Map. (2019). Doctor to patient ratio in India: State-wise analysis. https://indiadatamap.com/2025/09/11/doctor-to-patient-ratio-in-a-state-wise-analysis/
Ikpoto, E. (2022, July 24). Nigeria’s human capital development among the world’s worst. The Punch. https://punchng.com/nigerias-human-capital-development-among-worlds-worst-wbank
Isola, W. A., & Alani, R. A. (2012). Human capital development and economic growth: Empirical evidence from Nigeria. Asian Economic and Financial Review, 2(7), 813–827.
Jaiyeoba, S. O. (2015). Human capital investment and economic growth in Nigeria. African Journal of Economic Review, 3(1), 30–46.
Kenton, W. (2025). Per capita income explained: Uses, limitations and real-world examples. Investopedia. https://www.investopedia.com/terms/i/income-per-capita.asp
Lucas, R. E., Jr. (1988). On the mechanics of economic development. Journal of Monetary Economics, 22(1), 3–42.
Mankiw, G., Romer, D., & Weil, D. (1992). A contribution to the empirics of economic growth. The Quarterly Journal of Economics, 106(2), 407–427.
Ndubuisi, E. U. (2024). Examining the influence of human capital development indicators on economic growth: Insights from Nigeria. International Journal of Innovative Inventions in Social Science and Humanities, 1(3), 3050–3062.
Nigeria Gross Domestic per Capita. (2024). Nigeria GDP per capita. Trading Economics. https://tradingeconomics.com/nigeria/gdp-per-capita
Odigwe, F. N., & Owan, V. J. (2019). Trend analysis of the Nigerian budgetary allocation to the education sector from 2009–2018 with reference to UNESCO 26% benchmark. International Journal of Education Benchmark, 14(1), 1–14.
Olaleye, O. N., Ogunji, A. B., Adedej, A. A., Omotayo, M. A., & Momoh, J. O. (2026). From the laboratory to the market: A review of the research commercialization ecosystem in Nigeria. Journal of Novel Engineering Science and Technology, 5(2).
Omodero, C. O. (2019). Government sectoral expenditure and poverty alleviation in Nigeria. Research in World Economy, 9(2), 1–13.
Orga, J. I., Obi, A. V., & Osuagwu, B. O. (2021). Entrepreneurship development: A panacea for job creation for sustainable economic development in Nigeria: A study of selected communities in Anumiri LGA of Enugu State. Global Research Journal of Business Management, 1(1), 99–107.
Parsons, T. (1971). The system of modern societies. Prentice-Hall.
Ragan, C., & Lipsey, R. G. (2005). Economics (11th Canadian ed.).
Rahman, M. S. (2013). Relationship among GDP, per capita GDP, literacy rate and unemployment rate. British Journal of Arts and Social Sciences, 14, 169–177.
Rastogi, P. N. (2002). Knowledge management and intellectual capital: A paradigm of value creation. Human Systems Management, 21(4), 229–240.
Romer, P. M. (1986). Increasing returns and long-run growth. Journal of Political Economy, 94(5), 1002–1037.
Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5, Part 2), S71–S102.
Rosen, S. (1999). Human capital. In D. Card & O. Ashenfelter (Eds.), Handbook of labor economics (Vol. 3, pp. 855–939). Elsevier.
Rostow, W. W. (1960). The stages of economic growth: A non-Communist manifesto. Cambridge University Press.
Roux, A. (1994). Human capital and economic development. South African Journal of Economics, 62(3), 157–170.
Schultz, T. W. (1961). Investment in human capital. American Economic Review, 51(1), 1–17.
Smith, A., Around, E., Fressoli, M., Hernan, T., & Abrol, D. (2012). Supporting grassroots innovation: Facts and figures. SciDev.Net. https://www.scidev.net/globalfeatures/supporting-grassroots-innovation-facts-and-figures/
Smith, K., & Estibals, A. (2011). Innovation and research strategy for growth (BIS Economics Paper No. 15). Department for Business, Innovation and Skills, United Kingdom. https://assets.publishing.service.gov.uk/media/5a797ba0e5275274a6846909e78/11-1386-economics-innovation-and-research-strategy-growth.pdf
Sudanese American Physician Association. (2025). Top ten countries with highest poverty rate in the world in 2026. https://sapa-usa.org
Todaro, M., & Smith, S. C. (2009). Economic development (10th ed.). Pearson Education Limited.
United Nations Development Programme. (2022). Human development report: Uncertain times, unsettled lives: Shaping our future in a transforming world. https://www.undp.org/arab-states/publications/human-development-report-2021-22
United Nations Development Programme. (2024a, March 13). Human development report: Breaking the gridlock: Reimagining cooperation in a polarized world. https://hdr.undp.org/content/human-development-report-2023-24
United Nations Development Programme. (2024b, March 20). Valuable insights and findings of the 2023/2024 Human Development Report and its correlation to Nigeria’s Human Development Index. https://www.undp.org/nigeria/news/valuable-insights-and-findings-2023/2024-human-development-report-and-its-correlation-nigerias-human-developmentr-index
United Nations Development Programme. (2025). Human development report: A matter of choice: People and possibilities in the age of AI. https://hdr.undp.org/content/human-development-report-2025
World Bank. (2021). World development report: Data for better lives. https://wdr2021.worldbank.org/
World Bank. (2025). Expanding support for human capital in Nigeria: World Bank approves new financing for education, nutrition, and economic resilience. https://www.worldbank.org/en/news/press-release/2025/04/02/support-for-human-capital-in-nigeria-world-bank-approves-financing-for-education-nutrition-and-economic-resilience
World Health Organization. (2023). World health statistics 2023. https://media.un.org/unifeed/en/asset/d339/d3396187
