Nigeria’s $1trn economy dream faces human capital crisis

Nigeria’s ambition to build a $1 trillion economy faces a major constraint in the quality of its human capital, with deficits in childhood nutrition, learning and workplace skills estimated to cut the future earnings of a child born today by about half.

The World Bank’s latest human capital assessment, cited in the report, estimates that closing these gaps could increase future earnings by about 111 per cent, highlighting the enormous economic value of improving how Nigerian children develop, learn and prepare for work.

The finding shifts the trillion-dollar debate beyond infrastructure, investment and vocational training to the foundations of productivity laid during childhood.

Nigeria’s earlier Human Capital Index stood at 0.36 in 2020, meaning a child could expect to achieve only about 36 per cent of the productivity possible under full health and complete education.

The newer assessment, based on 2025 data, reaches a similar conclusion and places Nigeria behind countries such as India and Vietnam on key human-capital indicators.

Human capital is not the only determinant of economic growth. Infrastructure, capital, institutions and technology all matter. But the quality of the workforce determines how efficiently those resources can be converted into economic output.

That creates a fundamental challenge for Nigeria, where simply adding more people to the workforce will not be enough to more than triple economic output.

The first weakness begins with childhood health and nutrition.

About one in three Nigerian children under five is stunted, meaning their physical growth has been significantly affected by inadequate nutrition and repeated illness.

The economic consequences go beyond physical development. Early nutritional deprivation can also affect cognitive development and future learning capacity, potentially reducing productivity long before a child enters the labour market.

Education presents another major gap.

About nine million Nigerian children of primary-school age are out of school, while many of those enrolled are still not acquiring foundational skills at the required level.

The report notes that Nigeria’s performance on the World Bank’s harmonised learning measure in 2025 was slightly below its 2010 level, suggesting that actual learning outcomes have remained broadly stagnant over about 15 years.

The consequence is reflected in adult literacy, with about three in 10 Nigerian adults unable to read and write.

The figures challenge the traditional focus on school enrolment and certificates as measures of human-capital development.

For businesses, the problem appears in the widely cited difficulty of finding graduates with the skills required by employers.

The report argues that the skills deficit often begins much earlier than university. By the time a young person enters higher education, gaps in nutrition, literacy and foundational learning may already have limited his or her productivity potential.

That has significant implications for investors and employers.

Nigeria’s large population is often viewed as a source of cheap and abundant labour, but the human-capital data suggest that the supply of work-ready, productive labour is considerably smaller than the headline population figures imply.

Businesses therefore need to account for training, skills development and talent retention as part of the cost of operating in Nigeria rather than assuming that capable workers can always be hired off the shelf.

The investment opportunity consequently extends beyond universities and technology hubs.

Child nutrition, maternal health, foundational education and services that improve learning outcomes could produce economic returns that compound over decades.

The report also points to a broader opportunity for businesses operating in healthcare, education, nutrition, skills development and other sectors that strengthen the productivity of Nigeria’s growing population.

Nigeria’s challenge is not a shortage of talented people.

Nigerians who receive strong educational, health and social foundations already compete successfully in medicine, technology, finance and other highly skilled professions globally.

The problem is the proportion of children who reach adulthood without those foundations.

For a country pursuing a $1 trillion economic target, human capital is therefore not a social policy issue sitting outside economic strategy. It is a core productivity constraint.

The economic payoff from addressing it could be substantial because a healthier, better-educated and more capable workforce raises productivity across virtually every sector of the economy.

The trillion-dollar ambition may ultimately depend less on how many people Nigeria has than on how much productive capacity the country builds into those people from the earliest years of their lives