Impact of Human Capital Development on Economic Growth in Nigeria

Human capital development is considered as one of the key factors of sustainable economic growth, however, for Nigeria, the issue of the comparative impact of government spending on health and education in terms of current and capital expenditures remains poorly understood. The purpose of this study is to assess the impact of human capital development on economic growth in Nigeria. The methodological basis is the distributed lag autoregression model (ARDL), which makes it possible to evaluate the short- and long-term effects between variables with a mixed order of their integration. The empirical base covers annual data for Nigeria from 1970-2024 on GDP growth rate, government current health expenditure, Government capital expenditure on health, Government current education expenditure and Government capital expenditure on education. The results showed that the economic growth variable is stationary at the level, while the other variables are stationary in the first differences, which confirms the applicability of the ARDL approach. ARDL's long-term estimates showed that current education expenditures have a positive and statistically significant impact on economic growth (β = 0.039955; p = 0.0067), as do capital expenditures on education (β = 0.072462; p = 0.0030), while the impact of healthcare costs turned out to be statistically insignificant: for capital expenditures β = -0.03087 (p = 0.6185), for current expenditures β = -0.06336 (p = 0.1414). The results show that educational expenditures, especially capital investments in educational infrastructure, make the greatest contribution to Nigeria's economic growth. 

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