IMPACT OF INCLUSIVE ECONOMIC GROWTH ON ECONOMIC DEVELOPMENT IN NIGERIA

ABSTRACT This study analyzes the impact of inclusive growth on economic development in Nigeria from 1987 to 2025. It addresses the paradox of "jobless growth," where rising Gross Domestic Product (GDP) has not translated into widespread poverty reduction, leading to high poverty rates and significant wealth disparities. The research is grounded in the Human Capital Theory, with supplementary insights from the Institutions Approach. Using an Autoregressive Distributed Lag (ARDL) model, the study finds a strong, stable long-run relationship between inclusive growth indicators and economic development. Key findings indicate that government spending on education and health, along with credit to the private sector, have a significant positive impact on real GDP per capita. Conversely, a higher unemployment rate has a negative long-run effect on economic development , while inflation is found to be a detrimental factor. The model's negative and significant error correction term confirms that the Nigerian economy adjusts back to a long-run equilibrium after a short-term shock, at a speed of 45.2% per year. The study concludes that Nigeria's path to sustainable development requires proactive policies focused on human capital development, financial inclusion, and job creation, all underpinned by strong institutional frameworks. Policy recommendations include expanding health insurance, strengthening SME financing, and implementing an integrated employment strategy to address structural challenges and achieve shared prosperity. Keywords: Inclusive Growth, Economic Development, Human Capital, Financial Inclusion, ARDL Model, Poverty Reduction, Unemployment, Sustainable Development