RESOURCE RENT, HUMAN CAPITAL AND HEALTH OUTCOMES IN NIGERIA

Abstract

This study investigated the relationship between resource rents, human capital and health outcomes in Nigeria using co-integration, vector error correction modelling (VECM) and Granger Causality test over the period of 1980–2023. This study was premised on human capital theory and co-integration tests confirm the existence of a long run equilibrium relationship between resource rents, human capital and health outcome. The study also found that the effect of resource rent on human capital is negative, but the transmitted effect from human capital to infant mortality rate is found to be positive and significant. The effect of resource rent on gross fixed capital formation is negative and transmitted into a negative effect on life expectancy, but both of them are not significant. This indicates that resource rents were not effectively converted into productive physical capital and better health outcomes (life expectancy).In light of these findings, the study recommended that there should be targeted efforts to reinvest these resource rents into healthcare system. Investing directly in these areas would help mitigate the negative impact and improve long-term human capital development. In addition to this, the government should prioritise diversifying the economy and could reduce over-reliance on resource rents.