The impact of human capital on economic growth in Nigeria

INTRODUCTION

Human capital refers to the stock of competencies, skills, knowledge and personalities attribute embodied in individuals which facilitate their ability for the creation of personal, economic and social value (OECD, 2001), labour is one of the factors of production and can also be referred to as workforce.

Ojo and Oshikoya (1995) in their study found that literacy rate is positively related to per capita output growth, using other indices such as school enrolment, they found out that the sign of the coefficients were theoretically plausible also in the Zimbabwean economy. Arora (2001) in his study discovered that there is a cointegrated relationship between health and income; innovations in health according to him lead to economic growth and not vice versa.

Garba (2002) carrying out a cross-country analysis using regressions showed that there is positive correlation between educational attainment and economic growth and development.

Loening (2002) investigated the impact of human capital on economic growth through the application of error correction mechanisms. He examined two different channels by which human capital is expected to influence growth. The result revealed that a better educated labour force appeared to have positive and significant impact on economic growth via factor accumulation as well as on evaluation of total factor productivity.

Adamu (2003) determined the impact of human capital formation on economic growth in Nigeria between 1970 and 2000 using cointegration and error correction mechanisms. The result indicated that investment in human capital in form of education and training can lead to economic growth because of its impact on labour productivity.

Gyimah-Brempong, Paddison and Mitiku (2006) investigated the effect of higher education human capital on economic growth in African countries using panel data over the 1960–2000 period, a modified neoclassical growth equation, and a dynamic panel. They found that all levels of education human capital, including higher education human capital, have positive and statistically significant effect on the growth rate of per capita income in African countries. Their result differs from those of earlier research that find no significant relationship between higher education human capital and income growth. They also claimed that the growth elasticity of higher education human capital is twice as large as the growth impact of physical capital investment. While this is likely to be an overestimate of the growth impact of higher education, it is robust to different specifications and points to the need for African countries to effectively use higher education human capital in growth policies.

Nabil, Simon and Yu (2007) examined the dynamic effects of public investment in human capital in the Canadian context of population ageing using a computable overlapping-generations model (OLG). The decisions of time allocation between learning, working and leisure activity are endogenously determined in the model and react differently to tax policy changes. Learning time and public expenditures on education both improve human capital accumulation and effective labour supply. The simulation results indicated that a tax-financed increase in public spending on education may have significant crowding-out effects in the short run. In the long run, however, higher education incentives may increase the rate of human capital accumulation which in turn could mitigate the negative effects of population ageing. Furthermore, economic and welfare effects analysis shows that the impact depends on the distortions implied by alternative tax instruments and the productivity of public expenditures on education.

Lawanson (2009) in his work used an ordinary least squares model to estimate the role of education and health in human capital investment and economic growth in Nigeria. He found that on the average, human capital actually enhances economic growth in Nigeria although, the government expenditure on health and primary education enrollment have negative coefficients which are inconsistent with a priori expectation.

Dauda (2010), in his study on human capital formation and economic growth in Nigeria used the endogenous growth model in his investigation into their relationship, she employed enrolment in the different levels of education, primary, secondary and tertiary as proxies for human capital and found long-run positive relationship between human capital formation and economic growth in Nigeria with a feedback mechanism.

Amassoma and Nwosa (2011) studied the causal nexus between human capital Investment and economic growth in Nigeria for sustainable development in Africa at large between 1970 and 2009 using a Vector Error Correction (VEC) and Pairwise granger causality methodologies. The findings of the Vector Autoregression (VAR) model and pairwise estimate reveal no causality between human capital development and economic growth. The study recommends the need to increase budgetary allocation to the education and health sector and the establishment of sound and well-functioning vocational institute needed to bring about the needed growth in human capital that can stimulate economic growth. Also, the study identified that labour mismatch is an issue that government needs to reckon with in order to accelerate and sustain economic growth. In this regard, policy-makers in conjunction with employers and individuals need to update information on the real labour market value of different qualifications, in order to help them navigate through the increasingly complex education system and make the optimal kinds of educational investment decisions needed to propel economic growth.

Oluwatobi and Ogunrinola (2011) examined the relationship between human capital development efforts of the Government and economic growth in Nigeria. They seek to find out the impact of government recurrent and capital expenditures on education and health in Nigeria and their effect on economic growth. The data used for the study are from secondary sources while the augmented Solow model was also adopted. The dependent variable in the model is the level of real output while the explanatory variables are government capital and recurrent expenditures on education and health, gross fixed capital formation and the labour force. The result shows that there exists a positive relationship between government recurrent expenditure on human capital development and the level of real output, while capital expenditure is negatively related to the level of real output.

Adelakun (2011) conducted a study on human capital development and economic growth using OLS technique. It evaluates human capital using the GDP as proxy for economic growth; total government expenditure on education and health, and the enrolment pattern of tertiary, secondary and primary schools as proxy for human capital. He concluded that there is a positive relationship between government expenditure on education and health as well as pattern of enrolment in primary, secondary, and tertiary institutions in enhancing economic growth in the long run.

Adawo (2011) examined the contributions of primary education, secondary education and tertiary education to economic growth in Nigeria using an econometric model. These variables were proxied by school enrolment at various levels. Other variables included physical capital formation, and health measured through total expenditure on health. In all primary school input, physical capital formation and health were found to contribute to growth. Secondary school input and tertiary institutions were found to dampen growth.

Isola and Alani (2012) examined the contribution of different measures of human capital development to economic growth in Nigeria. The study used data from Nigeria and adopted the growth account model which specifies the growth of GDP as a function of labour and capital. The model also included a measure of policy reforms. Based on the estimated regression and a descriptive statistical analysis of trends of government commitment to human capital development, the study found that though little commitment had been accorded health compared to education, empirical analysis showed that both education and health components of human capital development are crucial to economic growth in Nigeria.

Adelowokan (2012) examined the effect of education and health expenditures on economic growth in Nigeria between 1970 and 2010 using a static regression model. He also established the long-relationship between human capital spending and economic growth using the Engle-Granger two-step cointegration procedure. The study found that public investment and public consumption (in education and health) exerted positive influence on economic growth, while, private investment exerted negative effect on economic growth in Nigeria. Similarly, the study showed that there was long-run relationship between economic growth and expenditure on education and health in Nigeria.

Akbari, Moayedfar, and Jouzaryan, (2012) investigated the effect of human capital on the economic growth of Iran in the long run and the short run using the auto-regressive distribution lag model .The results obtained from the estimation of the model under study are indicative of positive and significant effect of human capital on the economic growth of Iran. Thus, it is hoped that the results obtained from this study can attract the attention of authorities to the development and improvement of the human capital of the country.

Onyeagu and Okeiyika (2013) investigated the interaction between foreign direct investment and human capital on growth in Nigeria and tried to ascertain the long run sustainability of Foreign Direct Investment (FDI-) induced growth process using error correction mechanism. They found that FDI in Nigeria, had a negatively significant relationship to growth in the long run, meaning that the contribution of FDI in Nigeria is small and human capital had negative significant effects on growth in the long-run. The study claimed that this was due to shortage of skilled labour in the country. Linda (2013) investigated the common opinion on the positive relationship between human capital development and economic growth using simple production function to estimate the human capital impact on labour productivity. The study proxied human capital with average years of schooling from 2000 – 2010 and human capital stock and found that female human capital has positive impact on labour productivity during the period 2000 – 2010.

Eric (2013) focused on human capital as a driver of economic growth for developing countries. He argued that this has led to undue attention on school attainment. Developing countries have made considerable progress in closing the gap with developed countries in terms of school attainment, but recent research has underscored the importance of cognitive skills for economic growth. He claimed that attention has been shifted to issues of school quality and, in that area developing countries have been much less successful in closing the gaps with developed countries. Without improving school quality, developing countries will find it difficult to improve their long run economic performance.

Mba, Mba, Ogbuabor and Ikpegbu (2013) examined the relevance of human capital development on the growth of the economy using the ordinary least squares (OLS) technique. In the study, the GDP was used as a proxy for economic growth; Per Capita Real Gross Domestic Product, primary school enrolment, public expenditure on education and health, life expectancy and stock of physical capital as proxy for human capital. The study found that there was a strong positive relationship between human capital development and economic growth.

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THE PRACTICE OF TRADE UNIONISM AND THE IMPROVEMENT 0F ECONOMIC WORKING CONDITIONS IN NIGERIA: A CASE STUDY OF THE NATIONAL UNION OF TEXTILE, GARMENT AND TAILORING WORKERS OF NIGERIA, KADUNA

CHAPTER ONE

INTRODUCTION

1.0 BACKGROUND OF THE STUDY

The human element in the place of work makes the difference between man and any beast of burden or automation. This informs the emergence of Industrial or Labour Relations as a field of study and area of practice. Labour Relations is a fascinating subject, for it is about people and about people in the world of work. This world covers a vast range of types of production activities carried out in diverse surroundings in every country. The terms and conditions governing people at work, and the way these are arrived at, are the core of Labour Relations, and they are actually of crucial concern to the people involved. It is they who are not just close to the actions but immersed in it.

However, it is not only employees and managers “in a textile mill” who have interest in Labour Relations. The government of the country has an important stake, in part because it is an employer in its own right, also because it is the custodian of the public interest in Labour Relations policies and practices. “We associate Industrial Relations with the spread of industrialism, a process which began in Britain in the eighteenth century, with the first industrial revolution. It is topical, practical, and involves studying the working behaviours of a very large proportion of the people in any country, namely the labour force” (Johnson, 1983).

The issues of Labour Relations tend to shift from the question of the size and share of the proceeds of output to one of decision making:What and how much to produce, who to employ and dismiss, what benefits to institute, and who shall partake thereof. The problem is who shall make these decisions and how? Labour Relations is fundamentally concerned with the complex of power relationships and power sharing, economic and other decisions which affect or emanate from employment, conditions of employment and remuneration – between management, the employees (Trade union) and the state. “The central issue of Labour Relations is how to attain and maintain optimum level of productive efficiency and how to share the economic returns” (Yesufu, 1984).

In most organizations the sharing of the economic returns do not adequately reflect the contributions of the employees, simply because the managements in such organizations are usually obsessed with the development of the organization than that of the employees. This has had adverse economic effect on employees’ standard of living in a typical African country like Nigeria. “Workers throughout the world particularly in Africa, contributed immensely to the attainment of independence in their countries. But today, the greatest struggle is the eradication or alleviation of poverty, which recently became the campaign of halving global poverty level by 2050” (The Textile Worker, May 2005). A good economic working condition will make a good employee and consequently better output. One important way of achieving this is by wage supplements, that is, fringe benefits.

1.1 STATEMENT OF THE PROBLEM

Fringe benefits have become an important part of the total compensation of wage-earners. “These fringe benefits include those provided by law, those unilaterally introduced by employers and those obtained by unions through collective bargaining” (Rees, 1962:66). A labour union represents its members in negotiations with an employer over all aspects of an employment contract including wages and working conditions. These contract negotiations are known as collective bargaining. Where employees are represented by a union, the employer’s obligation to bargain has been interpreted by the courts to extend to fringe benefits as well as wages. By giving employees a united voice, a union can often negotiate better fringe benefits than individual employees can negotiate on their on. In the contemporary Nigerian economic society, fringe benefits are important in ensuring better income distribution for the employees.

Now, if wages are defined (as they usually are) as per hour paid for and not per hour worked, then fringe benefits include payments for time not worked. These include vacation, food subsidy and medical facilities, annual leave, maternity leave, gratuity and retirement, et cetera. Such fringe benefits should actually satisfy real needs. They are expected to be widely applied in the organization and there should be effective communication in educating employees concerning the fringe benefits.

However, one type of the general fringe benefits that has assisted the textile employee in coping with the impacts of the economic crisis on income more than any is perhaps the annual bonus. There has been consistent struggles by the National Union of Textile, Garment and Tailoring Workers of Nigeria (NUTGTWN) to see that its branch executives secure as much annual bonus as possible. “In the 1990s, bonuses had become an active issue in collective bargaining” (Aremu, 2001:38)

Bonuses have regularly been won by the union for its members, that is, the textile employees. But how far these have gone in improving the economic condition of its members is the concern of this study.

1.2 THE RESEARCH QUESTIONS

I. What level of economic working condition should the union ensure

its members attain?

II. What is the present economic working condition of members of the

union?

III. How has been the contribution of the end of year bonus to the lives of union members?
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IV. What other types of fringe benefits are of importance to the members of the union?

V. How can the union ensure the provision of better economic working condition?

1.3 OBJECTIVES OF THE STUDY

The main aims of this study are to:

I. Establish the present economic state of members of the union relative to where they should be.
II. Examine the performance of the end of the year bonus as a leading fringe benefit in the textile industry in the lives of members of the union.

III. Identify other significant fringe benefits and suggest better ways of improving the economic situation of members of the union.

1.4 JUSTIFICATION OF THE STUDY

The activities of trade unions have drawn attention to labour practices, economically, socially and politically. The study of the contributions of trade unions in improving the economic well being of employees is very significant. The relevance of the Labour Relations system in the contemporary Nigerian society cannot be over-emphasised.

This research work will highlight some of the reasons why the benefits of trade unionism should first be directed at the union members, who are the employees of the organisations. It will also bring to light issues that are of most concern to a typical Nigerian employee, as well as better ways of attaining the same. It will make studies in Labour Relations better understood and appreciated. It will give attention to better ways of meeting union members’ needs and also ensuring overall industrial harmony as well as improved national economic growth.

1.5 SCOPE OF THE STUDY

The global prevalence of trade unionism is well reflected in the Nigerian society. Various types of unions represent various categories of employees. However, because of its representation of a large number of the average employee in Nigeria and its contributions to the field of Labour Relations, the NUTGTWN is selected for this study.

The study is confined to Kaduna metropolis, and is concerned with union performance from 1994 to date. Like the city of Kaduna, the textile companies located here have employees from virtually all communities in Nigeria and the city is host to leading textile companies. The focus of the study is on employees of the textile companies who are also the members of the union. And end of the year or annual bonus, which is likely the leading fringe benefit, is the aspect of concern of the study.

1.6 LIMITATIONS OF THE STUDY

This study is not without constraints encountered. However the researcher is confident that their effect on the outcome is to a negligible level. These are:

i. Access to the officers of the union and the release of the necessary data has not been cooperative enough.
ii. Respondents. A lot of them are not willing to fill the questionnaires. Some that fill the questionnaires made avoidable errors in spite of its simplicity.

iii. The time limit for the study was not enough considering how data will be obtained and other necessary steps to be taken.
iv. The cost has equally been a constraint. These basically are the print and transportation costs.

v. The study materials for research and research related on this study were rarely available.Download Full Material-N5000

An Assessment of Corona Virus (COVID-19) on the Nigeria Economy

CHAPTER ONE/INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The World Health Organization (WHO)’s March 11 recognition of COVID-19 as a global pandemic has removed any doubt about the threat that the virus poses to every country in the world. The virus has now been detected in 152 countries, with more than 180,000 infected and more than 7,000 killed. Though Africa remains one of the regions with the fewest cases, the number of countries affected has increased over the past week. As of this writing, nearly 450 cases have been reported in 30 countries, concentrated in northern Africa and South Africa, with 10 deaths reported.

Many African countries have relatively weak health care systems, proactive measures to prevent the spread of the virus will be critical. Countries should step up campaigns to educate the public on best practices, including promoting good hygiene and social distancing, discouraging large public gatherings, and encouraging employers to protect the jobs of employees who require quarantine or treatment. Campaigns should elicit the help of religious and civil society leaders for maximum effect.

“It is unavoidable that the novel coronavirus epidemic will have a considerable impact on the economy and society” – China’s president Xi Jinping, televised address, February 23, 2020. “The spread of the new coronavirus is a public health crisis that could pose a serious risk to the macro economy through the halt in production activities, interruptions of people’s movement and cut-off of supply chains” – Japanese Finance Minister Taro Aso. G20 gathering in Riyadh, Saudi Arabia, February 24, 2020. “Honda Motor Co. will reduce vehicle output at two of its domestic plants in Saitama Prefecture for a week or so in March due to concerns about parts supply from China where a new coronavirus outbreak continues to disrupt economic activities” – Honda spokesperson, March 3, 2020. Besides its worrying effects on human life, the novel strain of coronavirus (COVID-19) has the potential to significantly slowdown not only the Chinese economy but also the global economy. China has become the central manufacturing hub of many global business operations. Any disruption of China’s output is expected to have repercussions elsewhere through regional and global value chains. Indeed, most recent data from China indicate a substantial decline in output. China Manufacturing Purchasing Manager’s Index (PMI), a critical production index, fell by about 22 points in February. This index is highly correlated with exports and such a decline implies a reduction in exports of about 2 percent on an annualized basis. In other words, the drop observed in February spread over the year is equivalent to -2 percent of the supply of intermediate goods. Indicators on shipping also suggest a reduction in Chinese exports for the month of February. Container vessel departures from Shanghai were substantially lower in the first half of February with an increase in the second half. However, the Shanghai Containerized Freight Index continues its decline thus indicating excess shipping capacity and lower demand for container vessels.

The case is also the same in Nigeria, the Corona virus disease (COVID-19) outbreak has put everything on hold in the country. The total figures of corona virus patients in Nigeria have risen to 12 after four new cases were confirmed in Lagos State on Thursday.

Lagos State health commissioner Akin Abayomi announced the new cases in Ikeja during a press conference. Abayomi disclosed that 14 people were tested but four tested positive for the coronavirus adding that one of the new index cases had contact with the third confirmed case in Nigeria. The commissioner said one of the patients, a Nigerian female, came into Lagos on Saturday, March 14, 2020, in a Turkish airline TK1830. A Nigerian man in his 50s who never travelled anywhere is among the new four cases, Abayomi said. He said the last patient is a Nigerian male who arrived the country in a Lufthansa (airline) LH568 on Friday, March 13, 2020. Abayomi said the patients have been isolated for treatment at the Infectious Disease Hospital, Yaba, Lagos. The commissioner, however, said more tests are being carried as there is a “combination of imported cases and local transmission. The Executive of Lagos State is meeting on the next stage of social distancing. “The best way to slow the rate is to halt the movement of the virus from person to person,” Abayomi said. “Currently, we are following over 1,300 people right now to find information about the state of their health and the number is increasing.” He appealed to people on the two flights to self-isolate themselves and contact the government.

1.2  STATEMENT OF THE PROBLEM

The outbreak of corona virus disease (COVID-19) pandemic in Nigeria has increase the level of tension and anxiety among citizens in the country. The virus unlike other cases we have had in this country is highly transmittable with severe signs and symptoms. The outbreak of corona virus disease (COVID-19) might have effect on the Nigeria economy through low imports and exports in the country, poor tourism remittance and commodity price rate in Nigeria. Lastly there have been studies on corona virus disease (COVID-19) but not even a single study is based on the effect of corona virus (COVID-19) on the Nigeria economy; hence a need for the study.

1.3 AIM AND OBJECTIVES OF THE STUDY

The main aim of the research work is to determine the effect of corona virus (COVID-19) on the Nigeria economy. The specific objectives of the study are:

1.  to determine the relationship between corona virus disease (COVID-19) and the Nigeria economy

2.  to determine the causes of corona virus disease (COVID-19)

3.  to determine the mode of transmission of the corona virus disease (COVID-19)

4.  to determine the effect of corona virus disease (COVID-19) import and export rates in Nigeria

5.  to determine effect of corona virus disease (COVID-19) on the education sector in Nigeria

6.  to determine the effect of corona virus disease (COVID-19) on the health and well being of the Nigeria citizens

7.  to recommends preventive measure to be adopted by the Nigeria government in fight against the corona virus disease (COVID-19)

1.4 RESEARCH QUESTIONS

The study came up with research questions so as to ascertain the above stated objectives of the study. The following research questions guide the objectives of the study:

1.  What is the relationship between corona virus disease (COVID-19) and the Nigeria economy?

2.  What are the causes of corona virus disease (COVID-19)?

3.  What is the mode of transmission of the corona virus disease (COVID-19)?

4.  What is the effect of corona virus disease (COVID-19) import and export rates in Nigeria?

5.  What is effect of corona virus disease (COVID-19) on the education sector in Nigeria?

6.  What is the effect of corona virus disease (COVID-19) on the health and well being of the Nigeria citizens?

7.  What are the preventive measures to be adopted by the Nigeria government in fight against the corona virus disease (COVID-19)?

1.5 STATEMENT OF THE HYPOTHESIS

H01: there is no significant relationship between corona virus disease (COVID-19) and the Nigeria economy

H02: corona virus (COVID-19) has no significant effect on the Nigeria economy

H03: corona virus disease (COVID-19) has no significant effect on the education sector in Nigeria

1.6 SIGNIFICANCE OF THE STUDY

The study on the effect of corona virus disease (COVID-19) on the Nigeria economy will be of immense benefit to all the Nigeria citizens, the health sector, and the federal government of Nigeria. The study will explore the prevalence of corona virus disease (COVID-19), the causes, and the effect of the corona virus disease (COVID-19) the Nigeria economy. The study will educate the masses on the mode of transmission of the corona virus disease (COVID-19) and the preventive measures to be adopted.  The study will educate the Nigeria government on the policy implementation to curb the prevalence of the corona virus disease (COVID-19) and how to improve the Nigeria economy during this period. The study will serve as a repository of information to other researchers that desire to carry out similar research on the above topic. Finally the study will contribute to the body of the existing literature on the effect of corona virus disease (COVID-19) on the Nigeria economy

1.7 SCOPE OF THE STUDY

The study will cover on the effect of corona virus disease (COVID-19) on the Nigeria economy

1.8 LIMITATION OF THE STUDY

Financial constraint– Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint– The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.9 DEFINITION OF TERMS

NOVEL CORONA VIRUS DISEASE (COVID-19) :

Coronavirus disease (COVID-19) is an infectious disease caused by a new virus. The disease causes respiratory illness (like the flu) with symptoms such as a cough, fever, and in more severe cases, difficulty breathing. You can protect yourself by washing your hands frequently, avoiding touching your face, and avoiding close contact (1 meter or 3 feet) with people who are unwell.

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