EFFECTS OF PUBLIC INJECTION/ EXPENDITURE TOWARDS HUMAN CAPITAL DEVELOPMENT
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EFFECTS OF PUBLIC INJECTION/ EXPENDITURE TOWARDS HUMAN CAPITAL DEVELOPMENT
Chapter one
GENERAL INTRODUCTIONS
1.1 Background of the Study
Economic Growth, which is the quantitative increase in output of goods and services in an economy at a particular point in time (i.e. Increase in production level of every sector of the economy), is one of the most important attributes of the macro-economic goals that every economy aims to achieve, but Economic Development is sustained growth in the economy accomplished by improvement in the standard of living of the people in the economy, it therefore considers an increase
Higher life expectancy, i.e. positive aspects of life
Higher education level.
Good health facility.
Lower mortality rate.
Higher per capita income.
Increased utilisation of natural, human, and financial resources in the economy.
Higher level of functional infrastructure
Basic amenities or essentials of existence, such as food, clothing, and shelter.
Public injection or expenditure is a move taken by the government to participate in financial operations on a sector or the entire country with the intention of affecting economic activity or achieving desirable or anticipated macroeconomic goals.
As the government, as the public sector, intends to participate in specific financial expenditures in its short or long-term budget, it strives to provide certain public goods to citizens in order to raise their standard of life, such as investing in human capital.
However, the realisation that a healthy and well-educated population boosts an economy’s productivity has moved the government’s attention to human capital investment. Human capital is now recognised as the most important factor of a country’s standard of living.
The quality of human resources determines a country’s growth and development.
Humans extract, process, and develop natural resources with the goal of benefiting humanity. Natural or physical resources of any kind will not, on their own, contribute to a nation’s development.
Thus, the extent to which a nation develops is governed by the level of human resources, which is proportional to the level of public injection or expenditure.
This explains the government’s ever-increasing expenditure on education and health to develop human resources in the economy. There is a correlation between high-quality education, health, and meaningful development.
Education improves people’s quality of life, promotes their health and productivity in both paid and unpaid work, and gives them more access to paid jobs.
According to Marble and Paltrino (1995), spending on education and health boosts per capita GDP, reduces poverty, and increases life expectancy.
This is because healthy and well-educated persons contribute efficiently to economic production and have a favourable impact on the economy.
Injection of cash into the development of human capital and enabling environments is currently an expenditure for the government, but it may generate revenue in the future.
Consider the United Kingdom, which has spent years investing in education and social infrastructure and today generates 40% of its revenue from Net Income from Abroad from international students and tourism.
Simply put, a country that is unable to develop its people’s skills and knowledge and effectively use them for national development will be unable to develop in terms of growth and output, and will be distinguished by low utilisation of both natural and human resources, as well as underdeveloped and poor infrastructures.
1.2 Statement of the Problem
Nigeria’s economic potential is widely recognised. It is the largest economy in the West African subregion. Given the country’s extensive resource base and coastal location, there is room for significant growth.
However, Nigeria has not fully realised its potential. Previous efforts in planning and visioning were not sustained. Economic stagnation, falling welfare, and social instability have hampered development over the better part of the last 30 years.
It is unfortunate to note that Nigeria’s educational standards have declined dramatically in both product and infrastructure when compared to other African countries with lower economic endowments, such as Ghana.
Despite increases in government spending on Human Resources Development over the years, its contributions to factors promoting economic growth and development have been minimal.
Based on this, it is worthwhile to investigate the nature of government expenditure on human resources in Nigeria, as well as the relationship between Human Resources Development factors and economic growth, in order to determine the effects of increased government expenditure on education and health on Nigeria’s economic development.
1.3 Significance of the Study
Individual abilities, dexterity, and competency serve as the foundation for national wealth, according to Adam Smith (1776). Human resources play critical roles in a nation’s growth, and their importance cannot be overstated.
Formal education and health are two major institutional mechanisms required for developing and augmenting people’s knowledge and attitudes; thus, it is critical to investigate the effects of government massive expenditures on education and health over the years, as well as their relative effects on Nigeria’s economic growth.
Many prior studies on the basis of human resource development growth in Nigeria have focused solely on government expenditures on education, ignoring the component of government expenditure on health.
This is really inadequate, as demonstrated by Odusola (1997) and Odubunmi (2007). To assess their combined effects on economic growth, government spending on education and health must be assessed jointly.
The primary goal of this research is to harmonise the two fundamental factors of Human Resources Development (Education and Health) as a result of Economic Growth and Development
which is a function of Public Injection / Expenditures in Nigeria for over three and a half decades between 1970 and 2009, due to their potential for developing human capital.
The study’s findings will supplement previous research findings/results in the areas of human resource development and economic growth.
1.4 Objectives of the Study
The broad objectives of this study are to evaluate and identify Economic and Development in Nigeria as a function of Public Investment, which would drive the development of individuals’ skills and abilities towards the fulfilment of the pre-conceived millennium goals -Vision 2020.
The objectives are arranged as follows:
1. To examine the pattern of government investment on education and health in Nigeria between 1970 and 2009.
2. To evaluate the impact and effects of government spending on economic growth and development in the country.
3. To create economic models that explicitly explain economic growth and development in terms of public injection, with a change in the former resulting in a change in the latter.
4. Draw the appropriate conclusions and provide recommendations to the country’s policy and budget planners.
1.5 Scope of the Study
The scope of this study will encompass government expenditures for 38 years, from 1970 to 2009. It is believed that these time periods are sufficient to access and establish the pattern of government expenditure on education and health for the development of human resources in the country.
The assumption is based on the fact that it represented the conclusion of the country’s civil war, forcing the reconstruction of the economy, and generally many development programmes have been accomplished within the following periods:
The Second National Development Plan, 1970-1974
The Third National Development Plan, 1975-1980
The Fourth National Development Plan, 1981-1985
Structural Adjustment Programme (SAP)—September 1986
1st National Ruling Plan, 1990-1992
National Economic Empowerment
Development Strategy (NEEDS) – 1999–2003
Vision 2020/Seven-Point Agenda – 2007 to date
All of these development plans are significant economic policies in Nigerian history since they all attempt to promote economic growth through deregulation, privatisation of all sectors, and the production of wealth. However, the study focuses on the Nigerian economy’s education and health sectors.
1.6 RESEARCH QUESTION.
1. Is there a relationship between public spending and economic growth and development?
2. Is human resource development a yardstick or social indicator used to measure a country’s economic growth and development?
3. What are the different effects of government intervention in the education and health sectors on the Nigerian economy?
4. Is the past pattern of government expenditures on education and health sufficient for sector growth and adequate economic development?
1.7 Hypothesis of the Study
The hypotheses of this study, drawn from the aforementioned question, are given as follows:
Hypothesis 1.
Ho: There is no statistically significant relationship between public injection/expenditure and economic growth and development in terms of human capital development, taking education into account.
Hi: There is a statistically significant relationship between public injection/expenditure and economic growth, as well as human capital development in terms of education.
Hypothesis 2.
Ho: There is no statistically significant relationship between public injection/expenditure and economic growth and development in terms of human capital development, taking into account health.
Hi: There is a statistically significant relationship between public injection/expenditure and economic growth, as well as development of human capital in terms of health.
1.8 Data Sources and Methodology of the Study To explore the effects of government spending on human resource development in Nigeria between 1970 and 2007, secondary data were utilised to calculate the values for the variables in the models.
Data for government spending on education and health, labour force participation, and gross domestic product were acquired from the Central Bank Statistical Bulletin (different issues), the Federal Office of Statistics, and the National Bureau of Statistics.
The analysis will be descriptive statistical in nature, comprising cross tabulation tables and percentages, as well as data regression utilising the SPSS software.
1.9 Organisation of the Study
The study will have five chapters.
CHAPTER ONE: The first chapter must include the study’s background, a statement of the research problem, the significance of the investigation, the study’s objectives, and the research questions that will lead the study.
CHAPTER TWO: The second chapter would summarise the views of experts on the subject.
CHAPTER THREE: The third chapter will describe the approach that will be used in the study.
The fourth chapter will focus on the presentation and understanding of the regression results.
CHAPTER FIVE: The final chapter will offer the summary of the findings, conclusion, and relevant suggestions.
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