The Impact of Physical and Human Capital Spending on Labour Productivity in Nigeria's Maritime Sector (1985-2022)

Abstract

It is evidenced from the available data that labour productivity in the Nigerian maritime sector has generally recorded an abysmally low rate over the years. In addition to this, it is also revealed that much has not been invested by the government in human capital and physical infrastructures in the country over the same period. In recent years, the Nigerian government increased its expenditure on education, health care services, and infrastructures such as road construction, and within the same period, there was a marginal increase in labour productivity in the Nigerian Maritime Sector. This research study uses the Ordinary Least Squares (OLS) method to provide an econometric assessment of the subject matter. This study does so by ascertaining the relationship between these two forms of government spending and labour productivity and analyzing their impact on other macroeconomic variables such as Gross Domestic Product (GDP) and per capita income. Overall findings reveal that in the long run, human and physical capital spending is an important determinant of labour productivity, which will in turn, have a positive impact on the performance of the Nigerian economy. While an increase in government total expenditure on education, not backed up by corresponding investment in real capital projects and power sector development, will impact its labour productivity negatively, with its attendant effect on the economy