THE POLITICS OF DEBT-FINANCED DEVELOPMENT AND HUMAN CAPITAL FORMATION IN NIGERIA

A COMPARATIVE STUDY OF AFRICAN PUBLIC ADMINISTRATION SYSTEMS (BOTSWANA AND RWANDA)

Abstract

This study examines the politics of debt-financed development and human capital formation in Nigeria, with a comparative perspective on Botswana and Rwanda. Against the backdrop of Nigeria’s rising public debt and persistent deficits in education and healthcare investment, the research investigates how political and institutional dynamics influence the allocation, management, and effectiveness of debt-financed projects. Using a mixed-methods approach, qualitative data were collected through semi-structured interviews with policymakers and document reviews, while quantitative data were obtained from national budgetary records, the
World Bank, and IMF databases covering 2015–2025. The qualitative data were analyzed thematically to identify recurring patterns in political prioritization, institutional capacity, and governance structures. Quantitative analysis employed descriptive statistics, correlation analysis, and regression models to examine the relationship between public debt levels and sectoral investments. Findings reveal that in Nigeria, political visibility and weak institutional coordination limit the effectiveness of debt in promoting human capital, with only 18–20% of debt-funded projects targeting education and healthcare. Correlation and regression analyses indicate weak
associations and low predictive power between debt and human capital outcomes in Nigeria, in contrast to Botswana and Rwanda, where robust governance frameworks and strategic project prioritization yield strong positive impacts. The study concludes that debt alone is insufficient to enhance human capital; effective institutional capacity, transparent governance, and policy discipline are critical. Policy recommendations include prioritizing human capital in debt allocation, strengthening institutional coordination, improving transparency and accountability, and adopting lessons from high-performing African counterparts.