Impact of Public Expenditure on Human Capital Development in Nigeria (1991-2011)

Abstract

"Taking a dataset of public spending over the period of (1991-2011), this paper attempts to explore the impact ofpublic spending on human capital development in the Nigeria. This has a spillover effect on Nigerian's developmental process. Despite the importance of human capital development in the Sub-Saharan economies, budget allocation on human resource development has generally been low in Nigeria. Human resource plays vital role in the economic development of any nation. Thus the human resources of an economy need all the necessary support for its development. In analyzing economic development in Nigeria, the research attempted examining the impact of government spending on human resource development.. Poor funding has been a long standing issue in Nigeria. The economy is characterized by fallen standard of education, technological backwardness, incessant strikes in the educational sector, unemployment etc. All these can result to economic stagnation. Econometric tools such as Ordinary Least Square (OLS) method of regression was employed on time series data from (1991-2011). The result shows a positive relationship between GDP (proxied for human capital development) and government expenditure on education and health. This means that an increase in public spending on education and health will boost human capital development. However this result showed a negative relationship between GDP and government expenditure. Thirty four percent (34%) variation in the levels of human resource development during the period under study was explained by changes in the allocation of public expenditure on education, health and community service. It implies that, there is a weak relationship between public expenditure and human capital development. The study proffered solutions like increase social spending in context of human resource development in order to boost economic development in Nigeria.