HUMAN CAPITAL DEVELOPMENT AND INDUSTRIAL SECTOR PERFORMANCE: THE WEST AFRICA EXPERIENCE

Abstract

It is evident that improvement in the industrial sector performance has a direct link with the return on investment in human capital development. There is no doubt that West Africa has witnessed instability, fluctuation and decline in industrial production over the years. Using comparative and trend analysis our paper determined the impact and the relationship of human capital development on the industrial sector performance in West African countries. We utilized secondary data from the United Nations Economic Commission for Africa (UNECA) Databank, Organization for Economic Co-operation Development (OECD), and the World Bank human development indicators from 1990 to 2017. Data were analysed using auto regressive distributed lag (ARDL) and the results were subjected to panel unit root test to ascertain data consistency. Our results revealed a positive impact of human development index (HDI) on industrial output in West African countries’, although this did not trigger much economic growth and industrial output in West African economies. We therefore conclude that West Africa’s human development index (HDI) level is inadequate in enhancing its economic growth and industrial output to reach the optimum of developed countries. This result is consistent with evidences of high poverty rates among West African Countries. Hence, we recommend that Economic Community of West African States (ECOWAS) set up efficient economic policy guide to promote human development and industrialization in West African countries.