HUMAN CAPITAL, SOCIAL INCLUSION AND ECONOMIC DEVELOPMENT IN NIGERIA
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This study investigated the impact of human capital and social inclusion on economic development in Nigeria from 1981 to 2024. Utilizing annual time-series data from the Central Bank of Nigeria and World Bank Development Indicators, the Autoregressive Distributed Lag (ARDL) model is employed to examine both long-run and short-run dynamics. Per capita GDP (PCGDP) was used as the proxy for economic development, while explanatory variables included government expenditure on health and education, life expectancy, social inclusion index, employment, exchange rate, credit to SMEs, rural bank branches, and trade openness. The long-run findings showed that government health expenditure, social inclusion index and employment significantly promote economic development. Other variables such as education spending, financial inclusion, and SME credit exhibit weak or negative effects. In the short run, employment remains positively significant, while credit to SMEs has a negative significant impact. The error correction term is correctly signed and statistically significant, confirming a stable adjustment toward equilibrium. The model explains 69% of the variation in PCGDP and passed diagnostic checks. The study concluded that while human capital and social inclusion are crucial for development, structural inefficiencies limit policy effectiveness. It recommended stronger investment in healthcare, job creation, SME financing reforms, and improved rural financial access to foster inclusive and sustainable growth.
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