CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Investment in education and health is widely regarded as the foundation of human capital development, sustained economic growth and poverty reduction. In the Nigerian context, recent evidence shows that although the country possesses substantial human and material resources, its human capital development still lags behind that of many African countries, largely because investment in the education and health sectors has remained inadequate (Toluhi, 2023). Campbell and Ogunro (2022) similarly report a long-run relationship between human capital development and poverty in Nigeria, with government spending on health among the factors that shape the poverty headcount in the short run.

The relationship between education and poverty can be understood in two complementary ways. First, investment in education raises the skills and productivity of poor households, which in turn improves wages and the overall welfare of the population. Bolarinwa (2023), for example, found that school enrolment and public spending on education significantly influence labour force participation in Nigeria, while Salami and Afolabi (2022) argue that vocational and technical education is an important route out of poverty and graduate unemployment. Second, poverty may itself be a major constraint on educational attainment. This constraint can be interpreted from three perspectives. From the resource side, poverty limits a household’s ability to pay for schooling and to acquire learning and other pedagogic materials. From the social side, poverty can generate pressures that weaken the motivation and outlook of poor students. From the institutional side, poverty that has taken hold of a school or community can erode the standard of teaching. Consistent with these perspectives, Adeleke (2024) found that poverty is a significant predictor of school non-attendance in the north-west and north-east of Nigeria, where more than ten million children of primary school age are out of school. The two directions of influence are therefore mutually reinforcing: Bala et al. (2025) observed that lower educational attainment of the household head is associated with a higher prevalence of household poverty and lower living standards.

The literature broadly agrees that education and poverty are inversely related, since a better-educated population acquires the knowledge and skills that support higher earnings and therefore contains fewer poor individuals. There is, however, a continuing debate about which levels of education matter most for poverty reduction, that is, whether primary education is sufficient or whether secondary, higher and tertiary education must also be considered. International development frameworks such as the Millennium Development Goals and the poverty reduction strategies promoted by the World Bank gave particular prominence to primary education and the schooling of the girl child as a gateway out of poverty. This emphasis helps to explain why many developing countries, Nigeria included, devote a large share of public education funds to the primary level. Recent Nigerian evidence, however, suggests that universalising primary education is not enough: Bolarinwa (2023) found that enrolment in secondary and tertiary education is positively associated with labour force participation and recommended wider access to quality secondary and tertiary education, together with technical and vocational training aligned with labour market needs. Providing primary education without adequate attention to the higher levels risks constraining development through outdated curricula and a shortage of the skills required in administrative and managerial positions.

The formal education system in Nigeria is organised into four broad levels. Pre-school education, intended for young children, is neither standardised nor compulsory and may last between one and three years. Primary education lasts six years (Primary 1 to Primary 6). Secondary education is split into junior and senior secondary school, each lasting three years. The fourth level is post-secondary education, which comprises universities, polytechnics and colleges of education (see Fagbemide, 2023, for an overview of the levels of education in Nigeria). Officially, children aged two to five years should attend nursery and kindergarten, those aged six to twelve should be in primary school, those aged twelve to eighteen in secondary school, and those above eighteen in post-secondary institutions. In practice, enrolment does not always follow this timetable, because some children begin school earlier or later than prescribed. In addition, an Islamic education system, practised mainly in northern Nigeria, runs alongside the formal system and is led by Muslim teachers and scholars. Children typically enter Quranic school at an early age, and the system remains an important source of basic literacy in the Quranic tradition. Government has sought to integrate this tradition with mainstream schooling through the Almajiri Integrated Model School programme under the Universal Basic Education scheme, although learner performance in the integrated schools has been reported to be below average (Jimba, 2021), and traditional Almajiri schools continue to face significant challenges despite successive reform efforts (Mohammed, 2024).

The importance of education to a developing country such as Nigeria cannot be overemphasised, and successive governments have described it as the bedrock of national development. After the civil war ended in 1970, education was seen as a vehicle for rapid national development, social change and the unification of a nation divided by conflict. To this end, the Universal Primary Education (UPE) scheme was launched in September 1976 to give every child access to primary education irrespective of social class or ethnic origin. The scheme produced a rapid rise in enrolment, but it fell short of expectations because of inadequate funding. The sudden growth in pupil numbers created shortages of school buildings and teachers, and its shortcomings have been attributed to inadequately trained teachers, insufficient infrastructure and instructional materials, and poor funding (Ajayi, 2021). Some state governments responded by shifting part of the cost of schooling onto parents.

A renewed commitment to basic education for all led to the launch of the Universal Basic Education (UBE) programme on 30 September 1999, in fulfilment of the global Education for All commitments (Ajayi, 2021). Basic education, which had earlier been equated with six years of primary schooling, now covers nine years, that is, primary school and the three years of junior secondary school. Despite the aims of the UPE and UBE programmes, funding has remained a persistent problem. Although the programmes were designed to provide free education up to a given level, the financial burden on government has often compelled parents to contribute to the cost of basic schooling. Fagbemide (2023) reports that the share of the national budget allocated to education peaked at only about 11 percent in 2015, far below the 26 percent benchmark recommended by UNESCO. As the cost of providing education has risen, the private sector has become more involved in schooling, and parents now bear a substantial part of the cost. Because many parents are poor, their children are often poorly equipped to learn. Access is a further problem, especially for children in rural communities, where learning facilities are frequently far from home, and long journeys to school can reduce pupils’ energy and contribute to lateness, absenteeism and truancy. Against this background, the present study assesses the impact of human capital development on poverty in Nigeria.

1.2 Problem Statement

Poverty is a multifaceted concept that takes different forms depending on the nature and extent of human deprivation. In absolute terms, it denotes insufficient access to, or the complete lack of, basic necessities such as food, housing and medical care. It extends to inadequate education and environmental services, consumer goods, recreational opportunities, neighbourhood amenities and transport facilities. In relative terms, people are poor when their incomes fall far below the average for their community, which implies that they cannot attain what the wider society regards as the minimum for a decent standard of living. More recent approaches define poverty as the experience of several overlapping deprivations, for example in health, education, living standards and work (Akoji & Abaji, 2025). In precise terms, the poor may be described as:

• individuals and households without access to basic services, political connections and other forms of support;
• households whose nutritional needs are not adequately met;
• ethnic minorities who are economically, socially and politically marginalised, deprived or persecuted; and
• individuals and households whose incomes fall below the poverty line and are insufficient to meet their basic needs.

The poverty situation in Nigeria is deeply troubling. Both quantitative and qualitative measures attest to the growing incidence and depth of poverty in the country. The 2022 national Multidimensional Poverty Index (MPI) reported that about 63 percent of the population, roughly 133 million people, are multidimensionally poor, compared with 40.1 percent who were poor according to the 2018/19 national monetary poverty line (Campbell & Ogunro, 2022). Poverty is also concentrated in rural areas, which are disproportionately affected (Akoji & Abaji, 2025). The trend over several decades is equally worrying. National statistics summarised in the literature show that the poverty rate rose from about 27 percent in 1980 to about 46 percent in 1985, eased to about 43 percent in 1992, jumped to about 66 percent in 1996, fell to about 54 percent in 2004 and rose again to about 69 percent in 2010, when an estimated 112 million Nigerians lived in poverty (Ajayi et al., 2016). This situation is paradoxical given the vast human and natural resources with which the country is endowed. It is even more disturbing that, despite the large human and material resources that successive governments have committed to poverty reduction, no appreciable success has been recorded.

At independence in 1960 and for much of that decade, poverty eradication in Nigeria centred on education and human capital development, which were regarded as the key to the nation’s economic, technological and intellectual advancement. The mantra “show the light, and the people will find the way”, often associated with Nigeria’s first president, Nnamdi Azikiwe, captured this outlook. Education and human capital programmes were accordingly implemented alongside agricultural extension services, which encouraged greater food production. The oil boom of the 1970s changed this orientation. Rising global oil prices boosted export earnings and per capita income sharply, but when oil prices later collapsed, export receipts fell with them, producing negative growth and a steep decline in per capita income during the 1980s.

The causes of poverty in Nigeria have been traced to several factors, including corruption, weak institutions and poor governance, unemployment, low productivity, rapid population growth, unfocused government policies, the absence of social welfare programmes and low human capital development. In a household survey in south-west Nigeria, for instance, corruption, weak institutions and poor governance were rated the most important cause of poverty, followed by unemployment, inadequate social and welfare programmes, and low human capital development (Ajayi et al., 2016). Structural weaknesses in governance, economic policy and social welfare systems have likewise been identified as the reason why poverty persists and why individuals find it hard to access opportunities for upward mobility (Akoji & Abaji, 2025). Successive governments have made many attempts to address the problem, yet no appreciable positive results have been recorded, and weak implementation remains a perennial obstacle to the realisation of programme objectives.

In this context, whether higher levels of education and health lead to greater human capital development and lower poverty is a basic concern for development economists. Empirical findings for Nigeria are mixed. Some studies report that education spending and enrolment significantly affect labour force participation (Bolarinwa, 2023), and that government health expenditure lowers mortality and raises life expectancy (Awoyemi et al., 2023). Poverty, in turn, has been shown to have a strong short-term influence on health outcomes (Abdulrahman, 2023). These findings point to a two-way relationship between human capital and poverty that warrants further empirical investigation. This research therefore sets out to assess the impact of human capital development on poverty in Nigeria.

1.3 Research Questions

The following research questions guide the assessment:

1. Does education have any impact on poverty in Nigeria?
2. Does health have any impact on poverty in Nigeria?

1.4 Research Objectives

The broad objective of this study is to determine the impact of human capital development on poverty in Nigeria. The specific objectives are:

1. To determine the impact of education on poverty in Nigeria.
2. To determine the impact of health on poverty in Nigeria.

1.5 Research Hypotheses

1. H₀: Education in Nigeria has no impact on poverty.
2. H₀: Health in Nigeria has no impact on poverty.

1.6 Policy Relevance of the Study

Perspectives on poverty have evolved considerably, and there is now wide acceptance of its multidimensional character and of the need to consider its depth and severity (Akoji & Abaji, 2025). Poverty is a complex social phenomenon, and a more accurate picture of it requires the incorporation of more information. By identifying the actual extent of human capital development and the poverty experienced in Nigeria, this study adds value to more effective policy targeting. Its findings bear on public decisions about how to allocate resources to education and health, an issue that recent studies have identified as central to improving human capital outcomes and reducing poverty (Campbell & Ogunro, 2022; Toluhi, 2023). Beyond this policy relevance, the study will assist students by providing a framework on which further research can be built, and by exposing them to a range of deprivation indicators beyond the traditional, conventional approach to measuring poverty.

1.7 Scope of the Study

The study investigates educational attainment, human capital development and poverty in Nigeria, using the Nigeria Living Standard Survey (NLSS 2008).

REFERENCES

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