Increased human capital development has the potential to drive permanent increase in the growth rate of the Gross Domestic Product (GDP) of any economy through increased innovation and technological progress, a report has stated.
According to the latest economic bulletin of the Financial Derivatives Company Limited, countries like Singapore, and South Korea, have continued to experience an upsurge in their economic growth due to massive investments in their educational sectors.
It stressed that no country committed to improving its economy can afford to rank so badly in terms of educating its population.
The report pointed out that Nigeriaâ€™s experience with human capital investment remains lack lustre.
Conversely, in Nigeria, public expenditure in education has remained substantially below the United Nations Education, Scientific and Cultural Organization (UNESCO) recommendation that 15 per cent to 20 per cent of the national budget should be allocated toward health and education. The 2017 budget invested six per cent in education, way off the UNESCOâ€™s benchmark.
The countryâ€™s economic renewal efforts have not fared much better when it comes to human capital, despite its enormous young labour force. The poor investments in human capital are reflected in Nigeriaâ€™s ranking near the bottom of the World Economic Forumâ€™s Global Human Capital Report.
The report, which ranks 130 countries on how well they are developing and deploying their talent and evaluates levels of education, skills and employment, ranked Nigeria 114 in its 2017 report6.
â€œFocusing on agriculture as an example, Nigeriaâ€™s efforts primarily leveraged capital accumulation as a means of diversification from oil exports. â€œStrategies such as the National Economic Empowerment and Development Strategy (NEEDS) and the Transformation Agenda have been adopted to boost growth in the economy. â€œThe NEEDS strategy involves employment creation, wealth creation, poverty reduction and value reorientation.
â€œWith NEEDS the government realised the need to develop entrepreneurial skills and SMEs. The focus, however, was on capital support, not skill development,â€ it stated.
Hence, it noted that the 2004 consolidation in the financial sector to provide cheap loans for the private sector.
In a similar vein, the Transformation Agenda aimed at a hunger-free Nigeria through an agricultural sector that drives income growth, accelerates achievement of food and nutritional security, generates employment and transforms Nigeria into a leading player in global food markets to grow wealth for millions of farmers.
â€œHere again the government provided low interest loans and capital finance for the agricultural sector, and again it ignored intensive training of the labour force employed by the agriculture sector.
â€œAs these policies invested little in education and training, they failed to address the largely unskilled labour force. Hence, agricultural productivity remained subdued.
â€œThe low productivity in the agricultural sector ensues from the use of obsolete farming techniques and equipment despite the government effort to enhance capital availability (e.g. equipment).
â€œThis is evidenced by farms that still use manual labour despite the machineries they possess. In this case training the workers in the specific skills and expertise to operate these machines would lead to increased output,â€ the report added.
According to the FDC, Nigeria needs to shift focus to realise its opportunities, adding that rather than focusing solely on diversification by capital accumulation, the nation needs to invest in the educational sector by building more affordable schools and universities, as private education is largely unaffordable and the public education institutions are overwhelmed with overfilled classrooms.
Furthermore, it stressed the need to establish research linkages between the existing universities and industries, saying that most giant strides achieved by humanity had been through educational research funding and subsequent discoveries in health and technology.
For example, the health research conducted at the University of Queensland in Brisbane, Australia led to the development of a vaccine to prevent cervical cancer in 2006 â€“ the worldâ€™s first cancer vaccine.
â€œNigeria can achieve similar success in its agricultural sector by allocating research funding to specialised universities such as the University of Agriculture in Makurdi, Benue State,â€ it added.