Human Capital
Human capital is an important factor for the wealth of a nation due to its influence on the overall production of the country. Technological progress can provide more efficient production-methods like machines and computers, but skilled labor is necessary to manage and develop them as well as to improve the quality and productivity of the existing labor. The formation of Nigeria's human capital is therefore of great importance in the coming years if Nigeria wants to be competitive in the future. However, Nigeria is having a problem with its human capital.
The Human Development Index (HDI) provides a measure of human capital development in three dimensions: income, health, and education. The latest values of HDI shows that Nigeria is ranked 156 with the value of 0.459 among 187 countries. The value places Nigeria in the bottom, meaning that Nigeria is considered to have low level of human development. The comparative value for Sub-Saharan Africa is 0.463, 0.910 for the US, and 0.682 for the world average. The HDI of Sub-Saharan Africa as a region increased from 0.365 in 1980 to 0.463 today, which places Nigeria below the regional average.
The value for the education index is 0.442, compared to the average in the US of 0.939. The expected years of schooling in Nigeria is 8.9 (16.00 in the US), while the mean years of schooling for adults over 25 years is 5.0 years (12.4 years in the US). Additionally, Nigeria is also facing a relatively high inequality, worsening the problem regarding the formation of human capital. The income distribution for the poorest (bottom 10%) is 1.6% while it is 40.8% for the richest (top 10%). Among 114 countries the income distribution places Nigeria respectively in 94th position for the poorest and 17th for the richest.
Even though human capital is only one factor of many that drives development and associated economic growth, it is very important factor for the development process for a developing country like Nigeria. The productive capacity of a country is related to the level of human capital, explaining why human capital formation must be considered of great importance in the future.
Read more about this topic: Economy Of Nigeria
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