Foreign aids and human capital development in Nigeria

Abstract

Government efforts towards the development of human capital in Nigeria from government budgetary allocations have not yielded the desired result. This study therefore examined the impact of foreign aids on human capital development in Nigeria from 1985 to 2022. The variables of the study consist of human capital development (HCD), foreign aids (AIDS), gross fixed capital formation (GFCF), literacy rate (LITERACY), exchange rate (EXCHR) and inflation rate (INFLA). These variables were sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin and the National Bureau of Statistics (NBS). The analytical technique of this study was the error correction model (ECM). The key findings show that foreign aids has a positive but insignificant impact on human capital development in Nigeria. Also, there is unidirectional causality relationship between foreign aids and human capital development in Nigeria. The study recommended that the Nigerian government should optimize the use of aids funds by adequately monitoring and supervising how aid funds are being utilized in the health and education sectors.