Human Development and Economic Growth in Nigeria: An Empirical Study

Abstract

This study empirically examines the impact of human development on economic growth in Nigeria. Specifically, the study looks into how human development affect real gross domestic product (RGDP) in Nigeria using time series data for the period 2003 to 2015. Error correction model (ECM) and Pairwise Granger Causality test are used in analyzing the data. The study carries out test of stationarity of the variables using Augmented Dickey–Fuller unit root test and test of long-run relationship among the variables using Johansen Cointegration test. The findings show that human development has significant causal relationship with economic growth in Nigeria. Unidirectional causality runs from human development to real GDP in Nigeria. All variables of the study are cointegrated and have a long-run relationship that indicates a divergence from equilibrium with a speed of 84%, hence, the explanatory variables have to be adjusted by 84% of the past year deviation from equilibrium. The study recommends among others that adequate attention be given to indices of human development index that is education, life expectancy, health and income in purchasing power parity amongst others as enlisted by the UNDP as improving on them will go a long way in improving the human production capacity of the people that would and hence translate to improvement in economic growth in Nigeria.