HUMAN CAPITAL DEVELOPMENT AND ECONOMIC GROWTH: A CATALYST FOR TOTAL FACTOR PRODUCTIVITY IN SELECTED SUB-SAHARAN AFRICAN COUNTRIES

Abstract

This study assessed the direct effects of human capital development and chosen total factor productivity components (technology and infrastructure) on economic growth in chosen Sub-Saharan African Countries during the period 1981-2020 using the panel least square method. The study employed the augmented Solow growth model. The variables used were the growth rate of Real Gross Domestic Product (RGDP) as the dependent variable; while the explanatory variables are Human Capital Development proxy by the Human Development Index (HDI); Physical Infrastructure Index (PII) as a proxy for Physical Infrastructure; Research and Development (R&D) to proxy technology; Labour force growth; Share of Private Investment in GDP, Trade Openness, Financial Openness and Share of Total Government Expenditure (SGE). The study established that human capital development on its own is not sufficient to bring about the needed growth in an economy, enhance, there is a need for complementary factors such as technology and infrastructure for human capital to actualise its full potential. The results of the direct effect of human capital development, physical infrastructure and technology on economic growth in chosen Sub-Saharan African countries indicated that Human Capital exhibited a positive relationship with economic growth, which implies that the economy grows when the human capital is strengthened. Physical Infrastructure also exerted a positive impact on the country's economic growth process, Physical Infrastructure positively induces the country’s growth. The study recommended that government spending should be centred on the infrastructural development which serves as the framework for industrial growth and export promotion.