Education Expenditure and Human Capital Development in Nigeria

The paper investigates the effect of government expenditure on education on human capital development in Nigeria. The method of Ordinary Least Squares (OLS) - otherwise known as the Classical Least Squares (CLS) – was used to estimate the specified model of the study which was analyzed using the regression analysis, having carried out the ADF test for unit root and cointegration test. Findings revealed that there is a significant relationship between education expenditure and human capital development in Nigeria. However, with the exception of life expectancy index and corruption which were not significant, education expenditure, health expenditure, and government effectiveness have significant effect on human capital development. Based on the findings of the study, the study recommends that: the government should adequately fund education in line with the international benchmark of 25% of the nation’s annual budget. This will help enhance the standard of education in the country. The government should also adequately finance the health sector. This will improve the country’s life expectancy and reduce the increasing medical tourism abroad. Adequate and functional laws should be put in place to help tame the systemic corruption that is eating into the bones and fabrics the nation’s economy.