The Role of Educational Investment in Promoting Economic Growth in Nigeria

This study examines the long-run relationship between education investment and economic growth in Nigeria, with particular emphasis on how public spending and school enrolment interact to influence economic performance. To ensure the reliability of the estimations, stationarity tests were first conducted on all variables to eliminate the risk of spurious regression results. Following this, the analysis employed the Fully Modified Ordinary Least Squares (FMOLS) technique alongside the Granger causality test to explore both long-run equilibrium relationships and directional linkages among the variables. The results indicate that all variables become stationary after first differencing, confirming that they are integrated of order one, I(1). Furthermore, the Johansen cointegration test reveals the presence of a single cointegrating equation, implying a stable long-run relationship among education expenditure, school enrolment, and economic growth. The findings also provide evidence of causality between investment in education and economic growth, suggesting that changes in education funding have meaningful implications for economic performance. The study establishes that government expenditure on education and educational participation significantly influence Nigeria’s economic growth in the long run. Based on these findings, it is recommended that policymakers prioritize effective management of both capital and recurrent education spending to enhance efficiency within the sector. Additionally, increasing budgetary allocations to education is essential to address infrastructural deficits, improve learning environments, and strengthen teaching conditions. In line with global standards, it is further advised that Nigeria strives to meet and potentially exceed the 26% education funding benchmark advocated by the UNESCO.