IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 4 NO. 2 2018

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Public Sector Investments and Human Capital Development in Nigeria: 1981 – 2016

M. O. Ndugbu (Ph.D), B. O. Osuka (Ph.D), & Duruechi Anthony H.

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Abstract

This study examined public sector investments and human capital development in Nigeria from 1981 to 2015. The study aimed at identifying the relationship between public sector capital investment in Administrations (ADM), Economic Services (ECS), Social and Community Service (SCMS) and Transfers (TRS) on human capital development. Times series data on ADM, ECS, SCMS, TRS and Human Development Index (HDI) collected from secondary sources via the Central Bank of Nigeria Statistical bulletin and World Bank Development Indicators were used in the study. The Johansen co-integration, analysis, Vector Error Correction (VECM) and Pairwise Granger causality analysis were employed in the data analysis. The Johansen cointegration result indicated the existence of long-run relationship between public sector investment variables and human capital development in Nigeria. In the same vein, the vector Error Correction Model (ECM) estimate equation is properly signed with a negative coefficient of -0.134169 and insignificant t–statistic probability value of 0.2272 at 5% level of significance. Thus, causality could not be established between public sector investments and human capital development. Consequent upon this, the variant influence analysis (R Student, DFFITS and COVRATIO) test or stability diagnostic analysis was employed to detect structural breaks. The study revealed that between 1991 up to 1993, 2000 up to 2006 and 2008 up to 2016 shows the presence of some structural changes in the system. This could be associated with changes in the economy say as a result of political instability, policy inconsistencies, high inflation rates, falling value of the naira among others. The study therefore recommended that government and stakeholders in the public sector should come up with policies to address the problems of economic imbalances. Addressing policy inconsistency and political instability through effective legislations and political will to enforce work ethics in public sect

keywords:

Public Sector, Investment, Human Capital Development, Structural Breaks

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