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,[7]
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.[8]
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.