Education and Human Capital Development in Africa

Hello Africa,

Education is the most powerful transformative force to build the world of tomorrow. It is the very essence of achieving sustainable economic development. Education raise people’s productivity, innovation, and creativity and promotes technological advancement. Many scholars of human development, agree that education, in every sense, is one of the fundamental factors of development.

Source: Education Finance Watch 2022, World Bank Group

Africa has been grappling with the consequences of low human capital, with a huge population, she has experienced low levels of skills and institutional development. Most resource-rich developing countries of Africa lack the necessary expertise to build the required human capital for productivity growth. Harbison (1973) indicates that human capital formation is the process of acquiring and increasing the number of persons who have the needed skills, education and experience which are critical for the economic and political development of the country.

In this article, and for clarity, human capital is associated with investing in the skills, coaching, experience, education, knowledge, and capabilities that are contributed by people to a business, so as to improve the creative and productive capacity. Human capital development, on the other hand, is a developmental paradigm, which focuses on the methods of developing a setting where people can live their full potentials and lead productive and useful lives, following their needs and interest. Okojie (2005) posited that human capital refers to the abilities and skills of human resources of a country, while human capital development is the process of acquiring and increasing the number of persons who have the skills, education and experiences that are critical for economic growth and development of a counntry’s economy. 

It will be observed that the varying differences in the development trajectory of the advanced countries, is the huge reserve of quality human capital and not so much on the abundant reserve of natural resources and stock of physical capital in the developing countries. Dauda (2010) agreed that human resources are a critical variable in the growth process and worthy of development. Natural resources are necessary ingredients for growth, but quality human capital is the required driver for economic growth and development. Nigeria’s socio-political and economic objective has been to be self reliant and self-sufficient, maintain peace and progress and sustainable development. However, with the low dearth of quality human capital, there is the urgent need to priotize human capital development. No country can effectively develop without skilled human resources to drive that growth. Human beings are the most important element in the production function and as the source of productivity and economic growth. Machines and technology and all other productive requirements are all a function of the human capabilities and the success of any productive venture. 

Source: Agricultural Productivity in Africa. Stefan Gladieu /World Bank (2016)

Productivity measures output per unit of input, such as labor, capital and other productive resources. This can also be calculated for the economy as a whole, as the ratio of GDP per hours worked. Productivity growth can be further sub-divided into labor growth, wage rate, and most importantly innovation and technology improvement. Output per worker, therefore, increase by the amount of capital available to each worker, the education and experience of the workforce, the quality of healthcare and improvement in technology.

 

Source: Industrial Revolution in Sub-Sahara Africa. Atalayar Oxford Business Group (2021)

Human capital is now the biggest driver of wealth. Two thirds of global wealth is human capital ( World Bank, 2017). Investing in people leads to greater wealth and faster economic growth. However, in low income developing countries, only 41% of wealth is human capital. In most African countries, there are low levels of investment in human capital and the resulting outcomes include, poor education and health outcomes which negates the possibility of a sustained growth and poverty reduction. Studies have shown that between 10% and 30% of the differences in per capita income between countries can be attributed to human capital.

Human capital contributes 40% of the total wealth of low income countries. Human capital theory is based on the assumption that a formal education or learning is the basis for improving the productive capacity of a population. Theorists of human capital have argued that when a population is educated, the population is productive. In this context, education raises the productivity of workers and the provision of formal education is seen as an investment in human capital and seen as much more important in the production process than physical capital.

Source: Human Capital Development in Africa. AfDB Group (2011)

The importance of knowledge and learning has been with us since the beginning of time. Investment in education has a higher payoff in the economic growth and development of a country. Akbari (2016) stated that education enriches people’s understanding of themselves and the world. It improves the quality of their lives and leads to broad social benefits to individuals and society. It also plays a very crucial role in securing social and economic progress, reducing poverty and inequality. Education directly impacts economic growth in so far as it directly affects human capital.

Human capital development is vital for Africa's economic growth, a large proportion of the yearly budgetary allocation should be targeted at these sectors. This way, the literacy rate is raised, health status of the population is improved. It is recommended that government should have the political will to ensure policies and programs for improving education are carried out, and from the result, in the course of this study, the government should play a more positive role in the education sector by way of allocating more funds. Secondly, there should be collaborations with the private sector by providing the enabling environment for active participation of this sector to provide more educational infrastructure. Thirdly, they should also ensure a stable macroeconomic framework to attracting foreign investment in the education sector. 

Overall, a literate population is a wealthy population. Education is a vital factor necessary for raising the level of human capital development, and ultimately drives economic growth in Africa.

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