Human Capital Investment and Poverty Reduction in Nigeria

1.OBAYORI, Joseph Bidemi,2.UDEORAH, Sylvester,3. ABORH, Kemkamma Bright


The paper examined the impact of human capital investment on poverty reduction in Nigeria. The study was motivated because of high poverty level that characterized underdeveloped economy.The objectives of the study were to examine how investment in both education and health will help to reduce poverty in Nigeria.Therefore, secondary data were collected from CBN statistical bulletin, United Nations and World Bank reports. The econometric methods of unit test and GMM test were used to analyze the collected data on education expenditure, health expenditure and poverty level in Nigeria. Based on empirical results; the KPSS stationarity testshowed that all the variables are stationary and the GMM result showed that both government expenditure in education and health were negatively and significantly related with poverty level were positively and significantly related. The implication of the findings is that a well-educated and healthy society vis-à-vis adequate funding in both education and health sectors will helps in poverty reduction in Nigeria. Based on the research findings, the study therefore recommended that adequate attention must be given to the reduction of poverty through increase in the funding or budget to both the education and health sectors in order to increase the intellectual capacity of the people as well as good health which will in turn lead to increase in production capacity of the economy and hence a reduction in poverty level.