Social Service Expenditure Efficiency and Human Development Outcomes in Nigeria: An Analysis of Education and Health Spending Effectiveness (2000-2023)

Abstract

Nigeria's investment in human capital through education and health expenditure hasrnremained consistently low relative to international benchmarks and development needs. This studyrnevaluates the efficiency and effectiveness of federal government spending on education and healthrnservices from 2000 to 2023, examining the relationship between expenditure levels and humanrndevelopment outcomes. Governmentrnexpenditure on education in Nigeria was reported at 4.4% of total government expenditure in 2023,rnsignificantly below UNESCO's recommended 20% benchmark. Using Data Envelopment Analysisrn(DEA) with bootstrap confidence intervals and two-stage regression approaches, this researchrnassesses the technical efficiency of social service expenditure and identifies factors constrainingrnoptimal resource utilization. The analysis reveals that despite nominal increases from ₦73.18 billionrnto ₦1,221.62 billion (16.7-fold growth), efficiency scores remain critically suboptimal, with averagerntechnical efficiency of 0.34 for education and 0.28 for health expenditure. Furthermore, efficiencyrndeteriorated over time, declining from 0.385 (2000-2005) to 0.275 (2021-2023). The study identifiesrnsignificant resource misallocation, with personnel costs consuming 78.2% of education budgetsrnagainst optimal levels of 60%, while infrastructure investment remains severely underfunded.rnCross-sectoral complementarity analysis demonstrates that coordinated investments yield 19%rnhigher returns than isolated sectoral approaches. Policy recommendations focus on rebalancingrnexpenditure composition, enhancing public economic management systems, improving servicerndelivery mechanisms, and developing integrated strategies that maximize education-healthrnsynergies to achieve potential annual savings of ₦275.7 billion.