The Role of Human Capital Development and Financial Deepening in Nigeria’s Industrial Output

Nigeria's industrial sector and financial deepening are critical components that have underperformed in driving the country's required industrialization process. This study examines the role of Human Capital Development and Financial Deepening on Nigeria's Industrial Output. The study investigates whether the advancements in human education and skills have synergized with the advances in the financial sector's depth and access to transform industrial productivity in the country. The analysis draws on annual time series data spanning 33 observations from 1989 to 2022. The data for the study is sourced from the World Bank Development Indicators (2022) and the Central Bank of Nigeria's annual statistical reports. The variables adopted in the study include human capital development, financial deepening, industrial output, trade openness, gross fixed capital formation and interest rate. The Autoregressive Distributed Lag (ARDL) approach was utilized to analyze the variables. The findings reveal that human capital development and financial deepening have negative and significant impacts on industrial output both in the short run and long run. However, the interactive effect of human capital development and financial deepening on industrial output showed a positive and significant impact in the short run and long run. The study recommends that the government should put measures in place to enhance the availability and accessibility of credit facilities for industrial enterprises and improve workers' education and skills in healthcare. Also, more concrete measures are required to promote investment and enhance entrepreneurship, innovation and creativity as the critical measures to boost industrial productivity in Nigeria.