ABSTRACT
This project was a review of the role of human capital in Nigerians economic development. The Statement of Problem identified was as fiscal crisis, inflation, heavy borrowings, and unprecedented economic and social costs. To meet the general objective, the study was focused on the following specific objectives: to determine the relationship between economic growth and human capital development, identify possible ways of achieving stability, material prosperity, peace and social progress and examine the impact of human capital formation on economic growth in Nigeria. The descriptive survey method was used and the research tool was questionnaire. 200 respondents answered the questionnaire. Data analysis using Chi-square formula and presentation was done by the use of tables. The findings from the study showed mainly that there is a relationship between economic growth and human capital development. Finally, solutions and recommendations were proffered on the impact of investment in education and training on national economic growth is positive and significant. The write up is duly summarized.
CHAPTER ONE INTRODUCTION
1.1 BACKGROUND OF THE STUDY
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 and growth 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 Adabayo (1996), human resources are critical variable 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 opines 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, build social, economic, and political organizations and carry forward national development and growth. Clearly a country which is unable to develop the skills and knowledge of it’s people and to utilize them effectively in the national economy will be unable to develop anything else”.
In order to ensure the economy delivers on it’s 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 not worthy that since the advent of civilian role 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.
1.2 STATEMENT OF PROBLEM
Over the years, successive Nigerian governments recognized the importance of human capital formation in the development process and have embraced on various programmes and projects which led to the establishment of educational institutions and health centres 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 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 resource development was neglected with adverse long – term development consequences (Oyinlola and Adum, 2003). Thus, the ultimate goal of economic growth which underscored the need to improve the well – being of people was overlooked.
1.3 OBJECTIVES OF THE STUDY
This study was embarked upon to achieve the following objectives.
(a) To determine the relationship between economic growth and human capital development.
(b) To identify possible ways of achieving stability, material prosperity, peace and social progress.
(c) To examine the impact of human capital formation on economic growth in Nigeria.
1.4 RESEARCH QUESTIONS
In a bid to address the issues raised in the research problem, the following questions will provide a guide
(a) What are the relationships between economic growth and human capital development? (b) What are the possible ways of achieving stability, material prosperity, peace and social
progress?
(c) What are the impact of human capital formation on economic growth in Nigeria?
1.5 RESEARCH HYPOTHESES
In order to prelude an analytical solutions to the research questions, the following proportions are made. The result of the test hypothesis will provide a scientific answers to the questions.
H0: There is no significant relationship between economic growth and human capital development.
HI: There is significant relationship between economic growth and human capital development
1.6 SIGNIFICANCE OF THE STUDY
The findings of this study would prove useful in the following ways:
(a) The findings would provide a means through which economic growth and human capital development would be largely achieved through increased knowledge, skills and capabilities acquired through education and training.
(b) The result of the study would make it clearly that a country which is unable to develop the skill and knowledge of it’s people and to utilize them effectively in the national economy will be unable to develop anything else.
(c) On the basis of the result of this study it will be understand that human resources are a critical variable in the growth process and worthy of development.
(d) The result of the study will make us to understand the role of human capital in economic growth, socio- economic and political transformation.
1.7 SCOPE OF THE STUDY
The data used for the study covers the period of 1990 to 2008. This study examines empirically the role of human capital in Nigerians economic development. Although several theories of endogenous growth point towards a positive effect of human capital on growth, empirical evidence on this issue has been mixed.
1.8 LIMITATIONS OF STUDY
The limitations of this study are as follows.
1. Inability to lay hand on some vital documents which are classifiable as security documents. This we believed would help in this analysis.
2. Some of the respondents were reluctant to complete the questionnaires as they believe that it was another academic exercise which would not add value or influence on how issue of problem of poor human capital and economic development would be resolved.
These limitations not with standing, it is hoped that findings of this research work will help to achieve the entire objective of the study
1.9 DEFINITION OF TERMS
(a) Human Capital Formation: Refers to the process of acquiring and increasing the number of persons who have the skills, education and experience that are critical for the sustainable growth and development of a country.
(b) Needs: National Economic Empowerment and development strategy
(c) UNDP: United Nation Development Project
(d) Economic growth: Refer to as real increase in the per capital income of a country.
(e) Unemployment: A situation whereby the people who are willing and capable to work, were unable to get employed.
(f) UNECA: United Nations Economic Commission for Africa
This material content is developed to serve as a GUIDE for students to conduct academic research
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