Effect of Government Expenditure on Human Capital Index in Nigeria

Abstract

The study examined the effect of government expenditure on human capital index in Nigeria. Government expenditure on administration, economic services, and social community services were the independent variables of the study, while human capital index was the dependent variable. The specific objectives were structured as follows: To ascertain the effect of government expenditure on administration on human capital index in Nigeria; to examine the effect of government expenditure on economic services on human capital index in Nigeria; and to investigate the effect of government expenditure on social community services on human capital index in Nigeria. The study adopted an ex-post-facto research design, covering the period between 2001 and 2021. Multiple regression technique was used for the data analysis. In line with the specific objectives of the study, it was revealed that Government expenditure on administration has a significant negative effect on human development index in Nigeria with a p-value of 0.0444 and t-statistics of -2.194267; Government expenditure on economic services has a non-significant positive effect on human development index of Nigeria with p-value of 0.3785 and t-statistics of 0.907474 and Government expenditure on social community services has a significant positive effect on human development index of Nigeria with p-value of 0.0403 and t-statistics of 2.245271. This implies that among the explanatory variables x-rayed, Government expenditure on administration and social community services are the major determinants of human development index in Nigeria. The study recommended therefore that the government should strive to block all the financial loopholes available to corrupt public officers and also ensure that any official caught perpetuating corruption should be prosecuted by relevant agencies. The government should increase the budgetary allocations made for agriculture, construction, transportation, communication. These expenditures increase human development in Nigeria. The government should ensure they increase the funds allocated to education, health, electricity and other social and community services. Such expenditures have proven to affect human development positively and significantly.