Human capital development indicators and poverty reduction in Nigeria

Abstract

The study determined the human capital development indicators and poverty reduction in Nigeria. The specific objectives were to: ascertain the impact of government education expenditure on poverty reduction in Nigeria and determine the impact of out-of-pocket health expenditure on poverty reduction in Nigeria. The research design was ex post-facto method. The variables consist of government education expenditure, government health expenditure, out-of-pocket health expenditure, poverty is poverty head count ratio and tertiary school enrolment rate for the period of 1990 to 2024 as defined in our model specification. All the variables were sourced from Central Bank of Nigeria’s (CBN) statistical bulletin and World Bank Data indicator of the time scope. The pre-estimation statistics includes descriptive statistics, Correlation Matrix of the Variables, Augmented Dickey-Fuller Unit Root test statistic, Johansen Co-integration test. The estimation technique includes Dynamic ordinary least square (DOLS) while post-estimation technique involves Histogram Normality Test. The empirical results showed that government education expenditure has 62 percent positive and insignificant impact on poverty reduction (t-statistics; 1.157737; p-value; 0.0000 > Sig-value: 0.8766) and out-of-pocket health expenditure has 31 percent positive and significant impact on poverty reduction (t-statistics; 5.51927; p-value; 0.0000 > Sig-value: 0.005). The study recommended that Federal Ministry of Education, in collaboration with state governments, should implement scholarship programs that target low-income families. This can be accomplished by introducing transparent scholarship schemes that involve community-based organizations and educational institutions to identify deserving beneficiaries, ensuring that these opportunities are not monopolized by affluent individuals.