TABLE OF CONTENTS
CHAPTER ONE (INTRODUCTION)
1.1 Background to the study
1.2 Statement of the research problem
1.3 Objectives of the study
1.4 Statement of the research questions
1 .5 Statement of the research hypotheses
1.6 Sources of data and methodology
1.7 Scope of the study
1.8 Significance of the study
1.9 Plan of the study
CHAPTER TWO (LITERATURE REVIEW)
2.1 Meaning of human capital development
2.2 Relationship between human capital development and economic growth
2.3 Health and education as component of human capital
2.4 Human capital development: Investing in Health and education
2.5 Human capital development in Nigeria
CHAPTER THREE (RESEARCH METHODOLOGY)
3.1 The data set and sources
3.2 Restatement of the hypotheses
3.3 Model specification
3.4 Methodology and a priori expectations
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS)
4.1 Presentation of data
4.2 Analyses of data and interpretation of result
4.3 Statistical decision
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
5.1. Summary of findings
5.2 Policy recommendation
5.3 Conclusion
BIBLIOGRAPHY
APPENDICES
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The role of human capital in economic growth cannot be
overemphasized. The development of human capital has been recognized by
economists to be a key prerequisite for a country's socio-economic and
political transformation. Among the generally agreed causal factors
responsible for the impressive performance of the economy of most of the
developed and the newly industrializing countries is an impressive
commitment to human capital formation.
(Adedeji and Bamidele, 2003; World Bank, 1995, Barro,
1991). This has been largely achieved through increased knowledge,
skills and capabilities acquired through education and training by all
the people of these countries.
It has been stressed that the differences in the level
of socio-economic development across nations is attributed not so much
to natural resources and endowments and the stock of physical capital
but to the quality and quantity of human resources. According to Oladeji
and Adebayo (1996) human resources are critical variables in the growth
process and worthy of development. They are not only means but, more
importantly, the ends that must be served to achieve economic progress.
This is underscored by Harbinson (1973) who opined that "human resources
constitute the ultimate basis for the wealth of nations. Capital and
natural resources are passive factors of production: human beings are
the active agents who accumulate capital, exploit natural resources, and
build social, economic, and political organizations. And carry forward
national development. Clearly a country which is unable to develop the
skills and knowledge of its people and to utilize them effectively in
the national economy will be unable to develop anything else".
Nigeria's most glaring objective since independence in
1960 has been to achieve stability, material prosperity, peace and
social progress. However, this has been hampered as a result of internal
problems. These include inadequate human development, primitive
agricultural practices, weak infrastructure, and uninspiring growth of
the manufacturing sector, a poor policy, inadequate regulatory
environment and mis-management and misuse of resources (corruption). In
order to ensure the economy delivers on its potentials, 'the country
experimented with two development philosophies-a private sector-led
growth in which the private sector served as the "engine house" of the
economy and a public sector - driven growth in which the government
assumed the "commanding heights" of the economy. The initial low level
of private sector development, however, led to public sector dominance
of the economy, encouraged by growth in the oil sector (UNDP, 2009).
It is noteworthy that since the advent of civilian rule
in 1999, growth performance has improved significantly. The last seven
years witnessed an average growth rate of about 6 percent (UNDP, 2009:5;
CBN, 2008) However, economic growth has not resulted in appreciable
decline in unemployment and poverty prevalence. Human development has
remained unimpressive as shown by the indicators in Table 1.
Table 1: Nigeria's Human Development Summary Statistics by Zones, 2009
|
Zones
|
Human
|
|
Human
|
Gender
|
Gender
|
Inequality
|
|
|
Development
|
Poverty
|
Development
|
Empower
|
Measure
|
|
|
Index
|
(HDI
|
Index
|
Measure
|
ment
|
(INQ)
|
|
|
Value)
|
|
(HPI)
|
(GDM)
|
Measure
|
|
|
|
|
|
|
|
(GEM)
|
|
|
North Central
|
0.490
|
|
34.65
|
0.478
|
0.244
|
0.49
|
|
North West
|
0.420
|
|
44.15
|
0.376
|
0.117
|
0.44
|
|
North East
|
0.322
|
|
48.90
|
0.250
|
0.1.18
|
0.42
|
|
South West
|
0.523
|
|
21.50
|
0.507
|
0.285
|
0.48
|
|
South East
|
0.471
|
|
26.07
|
0.455
|
0.315
|
0.38
|
|
South South
|
0.573
|
|
26.61
|
0.575
|
0.251
|
0.41
|
Source: UNDP (2010:5) Summary: Human Development Report Nigeria 2009-2010, UNDP, Abuja
1.2 STATEMENT OF THE RESEARCH PROBLEM
Over the years, successive
Nigerian governments recognized the importance of human capital
formation in the development process and have embarked on various
programmes and projects which led to the establishment of educational
institutions and health Centre’s throughout the country. However, in the
late 1970s and early 1980s, federal government spending grew
substantially resulting in fiscal crisis, inflation, and heavy
borrowings.
Subsequently, through the
austerity measures adopted in 1982 and Structural Adjustment Programme
(SAP) introduced in 1986, the country attempted to bring down fiscal
deficits as part of its stabilization and adjustment programmes, often
by reducing public spending on across-the board basis. These reductions
resulted in unprecedented economic and social costs as human resources
development was neglected with adverse long-term development
consequences (Oyinlola and Adam, 20_03). Thus, the ultimate goal of
economic development which underscored the need to improve the
well-being of people was overlooked.
In more recent times,
renewed attention was paid to the role of human capital formation in the
country's development process and this has prompted the federal
government to declare in its 1999-2003 economic policy programme that
"the economy exists for and belongs to the people, and at all times the
general well-being of all the people shall be the overriding objectives
of the government and the proper measure of performance" (FGN, 1999).
This .policy statement of the government is further reiterated in the
National Economic Empowerment and Development Strategy (NEEDS). The
provision of high-quality education and health care to all the country's
citizens is considered a key element of public policy by all levels of
government. Also, in the early part of this year, just before the
general election, President Good luck Jonathan approved the
establishment of new universities in order to enhance access to tertiary
education and thus boost human capital development. Though, the wisdom
behind the creation of new universities, to satisfy political needs,
when the existing ones are grossly under-funded, is questionable.
Against this background,
there is the need to examine if there truly exists a relationship
between human capital development and economic development on the one
hand, and also determine if investment in education and health care has
really been boosting human capital development.
1.3 OBJECTIVES OF THE STUDY
Following are the objectives for which this work is done.
- To examine the impact of human capital formation on economic development in Nigeria between 1983 and 2010;
- To determine if investment in education has been appropriately leading to economic development;
- To establish if there exists a link between health care development and economic development;
- And on the basis of the findings, recommend policies and measures for improving human capital formation in the country.
1.4 STATEMENT OF THE RESEARCH QUESTION
As a follow up to the preceding objectives, the following are the appropriate research questions.
- Is there a significant relationship between human capital formation and economic development in Nigeria?
- Is the relationship between investment in education and economic development significant?
- Is there a significant relationship between health care development and economic development?
1.5 STATEMENT OF THE RESEARCH HYPOTHESES
In order to be able to
provide answers to the questions stated above, the following null and
alternative hypotheses are tentatively stated.
Hypothesis I
H0: There
is no significant relationship between human capital formation and
economic development in Nigeria between 1983 and 2010.
HI: There is a significant
relationship between human capital formation and economic development
in Nigeria between 1983 and 2010.·
Hypothesis II
H0: The relationship between investment in education and economic development in Nigeria is not significant.
HI: The relationship between investment in education and economic development in Nigeria is significant.
Hypothesis III
H0: There is no significant relationship between health care development and economic development.
HI: There is a significant relationship between health care development and economic development.
1.6 SOURCES OF DATA AND METHODOLOGY
The data for this study
would be obtained mainly from secondary sources, particularly from
Central Bank of Nigeria (CBN) publications and that of the Federal
Office of Statistics and relevant journals, textbooks and financial
newspapers. The data to be collected include: gross domestic product
(which is used to denote economic development), enrolment in educational
institution, which is used to denote human capital formation; and
spending on education and health care development.
The research work will
make use of the Statistical packages for Social Sciences (SPSS) in
estimating the relationship between the variables as proposed by the
respective hypothesis. The Ordinary Least Square (OLS) technique will be
employed in obtaining the numerical estimates of the coefficients in
the model to be formulated. The OLS method is chosen because it
possesses some optimal properties; its computational procedure is fairly
simple and it is also an essential component of most other estimation
techniques. The estimation period will cover 1983 through 2010.
1. 7 SCOPE OF THE STUDY
The economy is a large
component with a lot of diverse and sometimes complex parts such that a
lot of variables do interplay in order to initiate the development
process. This work will however limit its searchlight on the
contribution of human capital development/formation on economic
development. Also, human capital formation is a variable that is largely
dependent on a host of factors other than educational and health care
development. Yet, these two are chosen because they are considered to be
the most important determinant of human capital formation. Thus, the
scope of this work is defined by the chosen variables.
1.8 SIGNIFICANCE OF THE STUDY
The study will explore the
impact or effectiveness of human capital formation on Nigerian economic
development. At the successful completion of this work, it is expected
that it will contribute to existing literature on the subject matter by
investigating empirically the role, which human capital formation play
on economic development of the country, and the contribution of
education and health care delivery to human capital formation ..
The-main importance of this study is that it will provide policy
recommendations to policy-makers on ways to improve the relationship
between human capital formation and economic development, and how
investment in education and health care delivery will appropriately lead
to the development of human resource.
1.9 PLAN OF THE STUDY
Following this chapter,
chapter two presents a review of relevant literature while chapter three
outlines the analytical framework and the model. Chapter four presents
and discusses the empirical data and results while chapter five
concludes the work.