Infrastructure, Human Capital and Industrialization in Nigeria

Udah E. B., Ebi Bassey


The objective of this paper had been to shed light on the importance of infrastructure and human capital on industrialization in Nigeria using time series data from 1970 to 2014. The methodology adopted in this paper was first to trace the historical background of the data using such tests as mean, minimum and maximum values, standard deviation, skewness, kurtosis and Jarque-Bera tests. Second, in order to smoothen the data and reduce white noise, the paper adopted Augmented Dickey-Fuller and Phillips-Perron tests for unit root and for co-integration, the paper used Engle-Granger two-step procedure and Johansen method. The paper captured the interrelationship among the variables with Pairwise Granger causality test. Thirdly, the paper proceeded to use Ordinary Least Squares (OLS) estimation technique. The co-integration tests using Engle-Granger two-step and Johansen methods showed that the series are co-integrated, thus, the use of OLS satisfies the Best Linear Unbiased Estimator (BLUE) with minimum variance property. The parsimonious results suggest that gross domestic investment, electricity supply and trade openness are the required elements to accelerate the pace of industrialization in Nigeria. This implied that providing adequate and stable supply of electricity, deepening public and private investments as well as opening the economy to the vagaries of international trade has short and long-termed lasting effect on industrial development. The policy perspective is that government should prioritize the generation and distribution of electricity, increase the quantum of investments in road infrastructure and opening of the economy in order to accelerate the pace of industrialization.


industrialization; electricity supply; paved roads; human capital; causality and co-integration

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