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ECONOMICS

ROLE OF HUMAN CAPITAL DEVELOPMENT IN ECONOMIC DEVELOPMENT.

ROLE OF HUMAN CAPITAL DEVELOPMENT IN ECONOMIC DEVELOPMENT.

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ROLE OF HUMAN CAPITAL DEVELOPMENT IN ECONOMIC DEVELOPMENT.

Chapter one

INTRODUCTION

1.1 Background of the Study

The importance of human capital in economic growth cannot be overstated. Economists recognise that developing human capital is a critical prerequisite for a country’s socioeconomic and political transition.

An amazing commitment to human capital formation is one of the widely accepted causative variables responsible for the impressive performance of the economies of the majority of developed and newly industrialising countries.

Adedeji and Bamidele (2003); World Bank (1995); Barro (1991). This has been largely accomplished through expanded knowledge, skills, and capabilities gained through education and training for all citizens of these countries.

It has been stated that inequalities in socioeconomic growth across nations are due to the quality and amount of human resources rather than natural resources, endowments, and physical capital stock.

According to Oladeji and Adebayo (1996), human resources are essential variables in the growth process and should be developed. They are not simply means, but also ends in themselves, that must be achieved in order to develop economically.

This is emphasised by Harbinson (1973), who believes that “human resources constitute the ultimate basis for the wealth of nations.” Capital and natural resources are passive components of production; humans are the active agents who amass capital, exploit natural resources, and establish social, economic, and political institutions. And promote national growth.

Clearly, a country that is unable to develop its people’s skills and knowledge and effectively apply them to the national economy will be unable to develop anything else.

Nigeria’s most visible goal since gaining independence in 1960 has been to establish stability, material prosperity, peace, and social advancement. However, internal issues have slowed progress.

These include inadequate human development, rudimentary agricultural techniques, weak infrastructure, uninspiring growth in the manufacturing sector, poor policy, an unsuitable regulatory environment, and resource mismanagement and misuse (corruption).

To ensure that the economy lives up to its potential, the country experimented with two development philosophies: private sector-led growth, in which the private sector served as the “engine house” of the economy, and public sector-driven growth, in which the government assumed the “commanding heights” of the economy.

The initial low level of private sector expansion, however, resulted in public sector domination of the economy, aided by oil sector growth (UNDP, 2009).

It is worth noting that with the implementation of civilian governance in 1999, growth performance has greatly improved. The last seven years have had an average growth rate of roughly 6% (UNDP, 2009:5; CBN, 2008).

However, economic progress has not resulted in a significant reduction in unemployment and poverty rates. Human development has been lacklustre, as evidenced by the metrics in Table 1.

Table 1: Nigerian 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.

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