An econometric analysis of foreign trade and human capital development in Nigeria

This study examined the nexus between foreign trade and human capital development in Nigeria from 1990 to 2023. Data was collected from the World Development Indicators, and Fully Modified Least Squares (FMOLS) and Pairwise Granger Causality were used to empirically assess the variables of interest. After critical analysis, the study drew the following conclusions. Firstly, a unidirectional causality flows from human development to total trade in Nigeria. Moreover, trade openness and human development have a minor negative relationship. FDI inflows and human capital development both have significant negative relationships. In light of these findings, the study submits the following for Nigerian policymakers: whenever their target is human capital development, the study recommends HCP complementary policies in education and health are prerequisites. The Nigeria’s oil exports should be more of value-added products than current crude products being traded in the global oil market. Total exports should be improved through policies that promote more non-oil exports, increasing total exports in the country. FDI inflows should be stimulated via business climate-friendly policies.