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 thereturn on investment in human capital development. There is no doubt that West Africa haswitnessed instability, fluctuation and decline in industrial production over the years. Usingcomparative and trend analysis our paper determined the impact and the relationship of humancapital development on the industrial sector performance in West African countries. We utilizedsecondary data from the United Nations Economic Commission for Africa (UNECA) Databank,Organization for Economic Co-operation Development (OECD), and the World Bank humandevelopment indicators from 1990 to 2017. Data were analysed using auto regressivedistributed 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) onindustrial output in West African countries’, although this did not trigger much economic growthand industrial output in West African economies. We therefore conclude that West Africa’shuman development index (HDI) level is inadequate in enhancing its economic growth andindustrial output to reach the optimum of developed countries. This result is consistent withevidences of high poverty rates among West African Countries. Hence, we recommend thatEconomic Community of West African States (ECOWAS) set up efficient economic policy guideto promote human development and industrialization in West African countries.