Human capital index and economic growth in Nigeria (1986-2025)

Nigeria's protracted struggle to convert its vast human resource endowment into sustained economic prosperity represents one of the most consequential development puzzles on the African continent. This study examines the relationship between the Human Capital Index (HCI) and economic growth in Nigeria over the period 1986 to 2025, incorporating five control variables, institutional quality, physical capital, technological adoption, demographic factors, and macroeconomic stability, to produce a comprehensive and contextually grounded empirical analysis. Anchored in the endogenous growth framework of Lucas (1988) and Romer (1990), the study employs Ordinary Least Squares (OLS), Dynamic OLS (DOLS), Fully Modified OLS (FMOLS), and the Autoregressive Distributed Lag (ARDL) bounds testing approach to investigate both short-run dynamics and long-run equilibrium relationships among the variables. The findings consistently establish that the HCI exerts a statistically significant and economically meaningful positive effect on GDP per capita growth in Nigeria, with an estimated long-run coefficient ranging from 7.84 to 8.43 across model specifications. Institutional quality and physical capital accumulation also emerge as robust growth drivers, while high inflation and an elevated dependency ratio exert statistically significant negative influences on output growth. Technological adoption, measured by internet and mobile penetration, contributes positively but modestly to growth, reinforcing the importance of digital infrastructure investment. Post-estimation diagnostics confirm the absence of serial correlation, heteroskedasticity, and structural instability, lending credibility to the inferences drawn. The study contributes to the thin body of long-horizon empirical literature on HCI and growth in sub-Saharan Africa and offers concrete policy prescriptions for education reform, institutional strengthening, and macroeconomic stabilisation in Nigeria.