Human capital—the productive abilities of human beings—is undoubtedly one of the key drivers of the economic advancement of a nation. An increase in human capital development results in higher labour productivity, improved innovation and creativity, and consequently bring about economic growth and development. This is evident from several studies that have established a positive and significant relationship between human capital development and economic growth.
Historically, the origin of the human capital concept can be dated back to the 18th century when Adam Smith—though did not use the term human capital—asserted that the acquired and useful capabilities of humans are a fundamental source of economic growth and development of a country. However, the human capital concept became widely recognized in the 1960s when the concept was introduced into the economics discipline.
Importantly, the human capital theory has been extensively criticized primarily because it permits bourgeois individualism which was seen as selfish and exploitative. Nevertheless, human capital is now a key element in the global strategy for development because investing in people is critical in ending extreme poverty and creating more inclusive societies.
Despite the relevance of human capital development in Nigeria’s economic growth, it is challenged by some factors such as poor human capital indices, corruption, infrastructural decay as well as human capital flight (brain drain). Human capital flight—the emigration of highly skilled and educated individuals to other countries of the world—is a major threat that is disproportionately affecting developing nations including Nigeria. Although, it argued that brain drain also presents some opportunities to the sending country such opportunities include an increase in remittances, promotion of integration into global markets, strengthening of inter-government relationships, return of more competent workers, increase in technological advancement et cetera. However, its consequences appear to surpass its benefits.
While human capital flight has been a major problem in Nigeria since the military dictatorship in the 1980s. It is however unduly worsened in recent times. Thus, there is an urgent need to provide long-lasting solutions to address this menace so that its aftermath could be prevented. This could be achieved by identifying and subsequently tackling the factors enhancing human capital flight in the country.
The Enablers of Human Capital Flight in Nigeria
The causes of human capital flight in Nigeria are multifactorial. However, they can be broadly categorized into governance, social, economic, and political factors.
Economic factor. In comparison to the world economies, Nigeria has been recording an economic improvement in the last five years according to the International Monetary Fund (IMF). But, this is not reflective of the livelihoods of Nigerians as more than 63% of persons living in Nigeria are multidimensionally poor. This ever-increasing poverty rate in the country can be, to a large extent, linked to unemployment and underemployment rates in the country. For instance, as of the last quarter of 2020, the underemployment rate was 22.8% and this was projected by the Nigerian Economic Summit Group (NESG) to increase to 37 per cent in 2023. Resultantly, the country’s net migration rate declined by 7.4%. Meaning, there was a significant increase in the exodus of human capital. Nigeria’s intellectuals are emigrating to the developed nations for better employment opportunities, improved working conditions and fairer payments. Similarly, due to the unstable economy of the country, the majority of Nigerians are financially insecure. This is causing not only psychosocial distress but also poor physical health in the affected individuals. Thus, these people tend to move out of Nigeria in search of financial security.
Governance factor. Good governance is a key driver of societal development. However, Nigeria has been experiencing a deteriorating quality of governance exemplified by the rising level of mismanagement and misappropriation of public funds, poor policy formulation and implementation, and failing public institutions to mention but a few. Consequently, this is generating frustration—evidenced by the number of protests in the last five years—among the educated and highly skilled professionals thereby potentiating them to leave the country to where ‘things are working’. Also, a report shows that poor leadership in the country is the leading cause of human capital flight and the establishment of good governance could avert further emigration of Nigerian talents. However, the Nigerian government seems not to be much concerned by the outbound emigration of skilled workers because there are no concrete policies and strategies in place to promote good governance. Thus, there is a continuous upsurge of large-scale relocation of Nigeria’s best brains to other countries.
Political factor. Considering the uproars and agitations of the Nigerian youths that follow the 2023 Nigerian presidential elections, it is no doubt that political instability is a major factor triggering the movement of skilled workers to developed nations. For instance, about 78%, 24% and 7% of Nigerians are willing to relocate if Peter Obi, Tinubu and Atiku lost the presidential election respectively according to social media poll conducted by Nairametrics. Additionally, the level of ethnic and tribal bigotry in the country is to some extent demeaning the efforts of highly qualified and competent individuals when applying for a job or position. Consequently, unqualified individuals are occupying key strategic positions. Overall, the competent individuals are not satisfied with the situation leading to seeking alternatives in a country where their competencies will be valued over their religion, ethnic or tribal affiliations.
Social factors. Insecurities- such as banditry, kidnapping, book haram insurgency, farmer-herdsman clash, and armed robbery- have been on the increase in the country. And this is significantly influencing the movement of educated individuals to a safer clime as it is believed that no one will invest in an insecure environment. As well, the Nigerian educational system is rapidly deteriorating due to poor funding, infrastructural inadequacy, and incessant strikes by university lecturers. Thus, Nigerians are trooping out to other countries and most of these people are not returning to the country after their education despite the sociocultural and identity challenges they tend to face in their host countries. This signifies the extent to which the country is unreceptive to manpower. What’s more, being that Nigeria is a multi-religious and multi-cultural society, religious fanatism and thugocracy are notably influencing human capital flight as studies have shown that religious crises in addition to communal turbulence account for more than 11% of the causes of brain drain in the country. It is worthy of mentioning that Nigeria’s poor infrastructural development (poor healthcare system, lack of safe and accessible water, epileptic power supply and poor road networks) is a key factor promoting the exodus of human capital. For instance, the epileptic power is causing some manufacturing companies to relocate to other neighbouring countries with stable power supplies to protect their enterprises. To cite an instance, the Michelin and Dunlop tyre companies have been reported to leave the country due to an epileptic power supply. Subsequently, their workers also tend to relocate with the company if given the opportunity.
Solutions to Safeguard Nigeria’s Economic Growth and Development
It is no doubt that Nigeria’s economy needs to be rescued urgently to avert the consequences of her poor economic growth and subsequently improve the lives and livelihoods of Nigerians. Prosperous economic growth could be achieved by sustained investment in human capital, physical capital and technology. Similarly, formulation and implementation of evidenced-based economy-stimulating policies are pivotal to stem the tide of economic stagnation.
Nigeria’s youthful population can provide the country with the workforce that is needed to advance the country’s economy. However, the country continues to lose its best brains to developed countries due to poor investment in and management of human resources. Thus, safeguarding the country’s economy requires smart and timely investment in human capital because, without a greater supply of homegrown talents in key strategic sectors, it will be hard for the country to attain economic prosperity.
The country’s human capital can be better positioned to shape the trajectory of the country’s economy by the provision of affordable and quality education and professional training. These training and education can be made affordable and accessible by the provision Public-Private educational grants and scholarships, especially for postgraduate and undergraduate students. By so doing, more Nigerians will be enrolled in higher institutions. And studies have shown that higher levels of education correspondingly result in increased productivity, innovativeness and creativity.
Additionally, the current conventional university education in the country should be complemented by entrepreneurship and vocational studies. The establishment and standardization of the School of Entrepreneurship and vocational studies will undoubtedly improve the human capital development of the country by creating more job opportunities. Thus, improving the country’s economic development.
Paradoxically, the provision of affordable, accessible and quality education without creating a safe, healthy and enabling working atmosphere will in the long run lead to a vicious cycle of brain drain. Therefore, government and development partners must strive to create an enabling environment for investors and private enterprises to be able to establish job-creating companies. Thereby, reducing the unemployment rates.
Furthermore, the government must decisively address all forms of insecurities in the country by establishments of institutionalized security measures rather than episodic measures currently being practised in the country. Additionally, the government should promote the principles of community ownership and community-driven security measures as this will likely expose the perpetrators of these evils.
As well, the importance of the provision of quality essential healthcare services cannot be over-emphasized as the World Bank has stated that “Health is a foundational investment in a country’s human capital”. The country’s healthcare sector can be boosted by increasing and proper utilization of the allocated budget for health to build a resilient, patient-centred and sustainable healthcare system.
Furthermore, physical capital such as factories, vehicles, machinery, equipment et cetera is essential for the economic development of society as it increases the productivity of goods and services which is the recipe for economic transformation. So, the establishment of more companies and restructuring of the current government-owned industries is critical in safeguarding the country’s economy. Also, investment in transport systems such as roads, bridges, and railways can increase the economy’s output and productivity.
More so, technology can transform the economy of the country. The current higher education is designed in a way that does not permit the students to work while studying partly because most Nigerian institutions are still using traditional classroom teachings. However, the adoption of digital technologies in Nigeria’s higher institutions will provide opportunities for students to contribute to the nation’s economy while studying. Similarly, the cooperation of technology in Nigeria’s health system will significantly improve the productivity of healthcare workers. Consequently, improve the country’s economy.
Importantly, without evidence-based and public-centred policies in place, Nigeria’s economy cannot be expected to flourish. Therefore, it is essential to prioritize policies that will facilitate investment in human capital, physical capital and technology. Such policies may include the direction of investment in highly productive and labour-intensive industries, an increase in the capacity of the universities and research institutes to enhance the development of new knowledge, technologies and strategies that improve productivity, reduction of taxation on research and development, reformation of intellectual property, increase the capacity of the universities to train more students in STEM-related disciplines, improvement of educational curricula contents with involvement of the private sector to match 21st century jobs and institutionalization of effective policy implementation monitoring and evaluation committee.
In conclusion, Nigeria’s current economic stagnation is multifactorial in origin. However, an increase in human capital flights is a notable factor. Thus, it must be decisively addressed by tackling its precipitating factors such as sustained investment in human and physical capital development in addition to the adoption of technology are critical to safeguarding the country’s economic growth and development. Also, the proposition and implementation of policies that facilitate the actualization of improved human and physical capital as well as technological advancement are equally pertinent to rescuing the country’s economy. Notably, without an educated, healthy and safe workforce, an efficient and work-enabling environment and transformative and innovative technological advancement, Nigeria cannot compete effectively in the global economy.