EXAMINE THE CAUSAL RELATIONSHIP BETWEEN HUMAN CAPITAL DEVELOPMENT AND INDUSTRIAL GROWTH IN NIGERIA BETWEEN 1981 AND 2019.

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TITLED PAGE.i

DECLARATION                                                                                                                      ii

CERTIFICATION                                                                                                                    iii

DEDICATION                                                                                                                          iv

ACKNOWLEDGMENT                                                                                                           v

TABLE OF CONTENT                                                                                                            vi

ABSTRACT                                                                                                                              ix

CHAPTER ONE: INTRODUCTION

  1. Background of the Study………………………………………………………………….1
    1. Statement of the Problem………………………………………………………………….2
    2. Research Questions…………………………………………………………………………4
    3. Objectives of the study………………………………………………………………………4
    4. Statement of hypothesis………………………………………………………………………4
    5. Significance of the Study…………………………………………………………………….4
    6. Scope and limitations of the Study……………………………………………………………5
    7. Definition of terms……………………………………………………………………………6
    8. Organisation of the study…………………………………………………………………….6

CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction………………………………………………………………………………….7

2.2 Conceptual framework………………………………………………………………………7

2.3 A Brief history of industrialization in Nigeria……………………………………………….10

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2.4 Theoretical framework……………………………………………………………………….13

2.5 Review of empirical literature………………………………………………………………17

2.6 Summary…………………………………………………………………………………….29

CHAPTER THREE: METHODOLOGY

3.1 Introduction………………………………………………………………………30

3.2 Research design………………………………………………………………….30

3.3 Methods of data collection……………………………………………………….30

3.4 Procedure for data Analysis and model specification…………………………….30

3.5 Justification of methods……………………………………………………………33

CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION

4.1 Introduction…………………………………………………………………………….34

4.2 Data Analysis and Result Presentation………………………………………………34

4.3 Test of Hypothesis………………………………………………………………………45

4.4 Discussion of Findings…………………………………………………………………46

CHAPTER FIVE:  SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 Summary…………………………………………………………………………………48

5.2 Conclusion……………………………………………………………………………….50

5.3 Recommendation……………………………………………………………………….50

5.4 Suggestion for further research………………………………………………….…….51

References……………………………………………………………………….…….……52

Appendix………………………………………………………………………………………56

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ABSTRACT

Human capital development is seen as a crucial point for attaining industrial growth, Nigeria is a country with high population the need for people to be enlighten on ways by which our population can be properly utilized to achieve industrial growth for long term sustainable growth and development, this will reduce the level of unemployment and enable industrial growth. However, the role of human capital on sustainable industrial growth in Nigeria has not been adequately explored. In view of various policies adopted by successive governments to advance industrialization in Nigeria, the study examined the role human capital development has had on industrial growth in Nigeria.  In addition, the independent variables such as Government expenditure on education, government expenditure on health and gross capital formation where used as proxies for human capital and industrial production was used as the dependent variable. Time series data covering the period between 1981 to 2019 sourced from the central bank statistical bulletin. The empirical analysis begins with descriptive statistics, the investigation of their stationarity of the variables specified under the model specification using the unit root test, the Johansen co integration test to examine the long run relationship between the variable the result show that there exist a long run relationship between the variables, the grange causality test was also used to examine the causal relationship between the variable, the ordinary least square regression analysis shows that human capital has a positive and significant relationship with industrial production as proxy by the gross capital formation. In line with this theory the human capital indicators such as government expenditure on education and government expenditure on health therefore exhibit a positive but statistically insignificant impact on industrial growth. The study concluded that the Nigerian government should ensure to allocate adequate resources for the development of human capital in order to enhance industrial growth in Nigeria, the study also recommended that the government should increase its total expenditure in health and education and a set a proper standard across the country so that proper human capital required for any individual to become productive is made available and industrial growth is enhanced.

Keywords: Human Capital, Industrial Growth.

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CHAPTER ONE:

INTRODUCTION

  1. Background to the study

Human capital is stated as a source of national development to all countries of the world. According to Khilji (2005) Education and health are the two major basics of human capital so therefore improving the quality of education and health services of the people is among the major ways of improving the quality of human capital given that the economy is provided with healthy trained human resources required for economic growth. Human capital is the term economists often use for education, health, and other human capacities that can raise productivity when increased (Todaro and Smith, 2009). According to Adekola (2014) the economic prosperity and functioning of a nation depend on its physical and human capital stock.Whereas the former hastraditionally been the focus ofeconomic research, factors affecting the enhancement of human skills and talent areincreasingly figuring in empirical research especially due to its role in industrial growth and economic prosperity of anation.

Although there are many ingredients of human capital but education and health are undoubtedly the most important components. It has been discovered that if an economy is to develop its human capital base, there must be the support of capital resources to complement human capital development. These capital resources could include Federal funding through increased budgetary allocation to the educational sector, infra- structural development, enactment It has been argued that the success or achievement of any development plan will depend largely on the realization of the critical role of human capital and that investment on human capital accounts for the rapid economic development of most countries. Olayemi (2012) pointed out that human capital

development stands out as a major catalyst to Industrial development and consequently economic growth. Thus, Babatunde and Adefabi (2005) argued that human capital development is triggering economic growth through factors like enhancing the employment opportunities and industrial development by increasing the number of knowledgeable workers and improving their skills and enabling them to new challenges.

On the other hand, Industrialization is generally accepted by policy makers, economic planners, researchers and professionals as one of the most desirable means for achieving objectives such as improvement in welfare, securing of vi-able employment, increasing of consumer and capital goods as well as expanding people’s choices generally. During the process of Industrialization, the use of extensive technology to boost productive patterns cannot be overemphasized. As a result, the development of the industrial sector, which is central to industrialization, will involvethe use of skilled personnel, extensive technology innovative management techniques, and other re-sources will be used to move an economy from inefficient means of production to the use of more sophisticated system. Therefore, as part of the human capital development process, there is the need for acquiring and increasing the number of persons who have the skills, education and experience in different fields of endeavour, as this is critical for the sustainable growth of a country

  1. Statement of the problem

The priority of any country is to effectively, ethnically and efficiently manage the economy of the country for profitable long-term sustainable development and growth therefore; Human capital development plays a vital role in achieving long term sustainable industrial growth in Nigeria. Nigeria as one of Africa’s biggest economies still battles with problems of human capital development despite its large labour force and abundance of natural resources has still not been able to efficiently use its human capital on industrial growth to achieve sustainable economic growth. The most important dimensions of human capital include Education and health Therefore, what really matters in Nigeria is the empowerment of people majorly in the aspect of education and health and industrial mobilization for economic surplus into productive investment channels. There is also the need for the Nigerian economy to eliminate or minimize those constraints towards human capital development so as to enhance rapid industrial growth.

A large percentage of Nigeria’s population estimated to be 182.2 Million

Nigeria is endowed with abundant natural and human resources. It is expected that with such abundance of natural and human capital resources, Nigeria would have become a prominent figure among the most industrialized nations in the world. Sadly, one would wittingly agree that the situation appears to be the reverse. Nigeria continues to wallow in economic under development and technological backwardness. Iheriohanma (2004), posits that Nigeria’s development experience since her independence has been that of relatively poor economic performance as a result of low industrial productivity. The nation’s Gross Domestic Product (GDP) is decreasing and decline in productivity has led to reduced income, organizational closures and loss of jobs. Although the industrial sector in Nigeria is gradually picking up, but some of the principal challenges include poor infrastructure and lack of human capital. In Nigeria, the human development indicators have performed poorly over the years. The 2016 UN Human Development Report ranked Nigeria 153rd out of 193 countries. In addition, the failure of past government at infusing greater transparency and accountability in policy formulation affected the desired growth in the industrial sector.

  1. RESEARCH QUESTION

From the above stated problems, the following questions then arise;

  1. What is the relationship between human capital development and industrialization in Nigeria?
  2. Does a long run relationship exist between human capital and industrialization in Nigeria?
    1.    OBJECTIVES OF THE STUDY
  3. The main objective of this study is to examine the causal relationship between human capital development and industrial growth in Nigeria between 1981 and 2019.
  4. To test if there is a longrun relationship between human capital development industrial growth in Nigeria.