Human capital development is a means
of developing skills, knowledge, productivity and inventiveness of people through
process of human capital formation. It is a people centered strategy and not
goods or production centered strategy of development. The theory of human
capital development emphasises how education increases the productivity and
efficiency of workers by increasing the level of cognitive skills possessed by
the work force. The Garry Beeker and Jacob Mincer (2001) introduced the notion
that people invest in education to increase their stock of human capital. The
proponents say human capabilities, which can be formed by combining innate
abilities with investment in human beings (Balola, 2000).
Example of such
investment includes expenditure on education, on the job training, health and
nutrition. Such expenditure increase future productive capacity at the expense
of current consumption. However n the past much planning in Nigeria was
centered on the accumulation of physical capital or rapid growth and development,
without recognition of the important role played by human capital development
process. A number of defective incentive system in Nigeria resulted to the current
waste of human resources and often, high incidence of poverty and greater
inequality in the distribution of income.
The stock of human capital increase in
a period only when gross investment exceeds depreciation with the passage of time, with intense use or with
lack of use. The provision of education is seen as a product investment in
human capital.
An investment, which the proponents of
the human capital theory considers as equally or even more equally worthwhile
than that in physical capital (Ogujiuba and Adeniyi, 2003).
The federal government of Nigeria
reform agenda is anchored on the National Economic Empowerment and development
strategy (NEED) document it was indicated that adult literacy rate of atleast
65% by 2007 would be attained. The NEEDS recognises the centrality of human
capital development in achieving economic growth. It was described as a vital transformation
tool. Therefore, the strategy aims at empowering the citizenry to acquire
skills and knowledge that would prepare them for the would of work (NEEDs,
2004).
Human capital theorists have established
that basic literacy enhances the productivity of workers in low slow
occupation. They further state that an instruction that demands logical or
analytical reasoning or provides technical and specialised knowledge increases
the marginal productivity of workers in higher ill or professional position.
Moreover the greater the stock of human capital in society and consequently,
the greater the increase institutional productivity and economic growth (UNDP,
1994).