ANALYSIS OF HUMAN CAPITAL FORMATION AND ECONOMIC DEVELOPMENT IN NIGERIA (1981-2015).
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ANALYSIS OF HUMAN CAPITAL FORMATION AND ECONOMIC DEVELOPMENT IN NIGERIA (1981-2015).
Chapter one
INTRODUCTION
1.1 Background of the Study.
In the past, emphasis has been placed on the accumulation of physical or material capital at the expense of human capital in Nigeria’s quest for rapid economic development, ignoring the fact that the major source of per capital output in any country, whether developing or developed with a market economy or centrally planned, is an increase in productivity per capital output growth, which is an important component of economic development or welfare. (Abramovitz, 1981).
Studies have proven that humans are the most essential and potential source of productivity growth, as well as economic growth and development.
Human minds create equipment and technology, and only humans can turn them into productive tools. The success of every productive programme is dependent on human innovation and ingenuity.
Harbison and Myer (1964) define human capital development as the process of enhancing people’s knowledge, skills, and capabilities. Economists have recognised the importance of human capital stocks and rates of accumulation in the development process.
Kennedy (2004) succinctly summarised the critical link between both processes as follows: manpower is the basic resource, and it is the indispensable means of transforming other resources to humanity’s uses and advantage. How successfully we develop and employ will decide how much we can achieve as a country.
The stock of human capital, like the stock of natural and physical growth, will degrade and decay if not developed and maintained through public health sanitation, social welfare services, nutrition, and guaranteed employment programmes.
In order to achieve long-term growth and development, these important human capital formation indexes should be incorporated into the national development planning process.
The concept of human capital refers to a country’s human capital resources’ abilities and skills, whereas human capital formation refers to the process of acquiring and increasing the number of people with the skills, education, and experience required for a country’s economic and political development.
According to Okojie (1995), human capital generation is linked to investment in people and their growth as creative and productive individuals.
The overall effort and cost required in massively increasing people’s productive capability constitutes investment in human resources, often known as manpower development or human resource development.
Human resources are all-encompassing and include everybody who is already working or who is likely to be productively engaged in the future. In effect, human resource development aims to benefit almost the entire population.
As a result, human capital building is a continuous process that occurs from childhood to old age and is essential for any community or organisation that desires to survive in the face of difficult problems in a changing world.
Education and training have been acknowledged as the most effective direct methods of improving human intellect and abilities for productive job (Yusuf, 2000).
However, human capital building extends beyond the acquisition of intellectual development through professional and training organisations to encompass enterprise in-house arrangements and even individual self-effort.
Human capital formation entails increased academic enrollment, government funding for education, health, economic services, and other social/community services.
As a result, human capital formation is divided into three categories: government expenditure on education, health, and social/community services.
Increased student enrollment from primary to tertiary levels is a crucial prerequisite for economic growth because it has increased the size of the labour force/academic enrollment in Nigeria since 1980. In some aspects, this reflects the government’s increased involvement in human capital development in Nigeria.
Education has a positive impact on the economy; so, government spending on education and training is critical if the goal is to move the economy to higher levels of production and income. Education helps to improve abilities and enable people to adapt to new difficulties.
1.2 Statement of Problem
It was recognised that no country can achieve considerable economic growth unless its human capital is adequately developed. Historically, much of Nigerian planning focused on the acquisition of physical capital for quick expansion and development, with little regard for the critical role that human capital plays in the development process.
The Human Development Index measures three aspects of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and education at the primary, secondary, and tertiary levels), and having a decent standard of living (measured by purchasing power parity and income).
Manpower development was not viewed as necessary for economic progress. The issue then arises: why hasn’t Nigeria experienced economic development despite the wealth of massive people and material resources and a decade of elaborate manpower and development planning?
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