Title: Human Development Index in Nigeria: Does Tobacco Taxation Matter?
Authors: Chiamaka Lauretta Anaike , Dr. Gilbert O. Nworie
Volume: 10
Issue: 7
Pages: 113-121
Publication Date: 2026/07/28
Abstract:
This study examined the effect of tobacco tax on the Human Development Index (HDI) of Nigeria. The study adopted an ex-post facto research design. Secondary data were collected from the National Bureau of Statistics (NBS), the Federal Inland Revenue Service (FIRS), and the Central Bank of Nigeria (CBN) Statistical Bulletin over a 25 year period that spanned 1999 and 2023. The inferential analyses were preliminarily done with Unit Root Test for stationarity, and Hansen Parameter Instability Cointegration Test for long-run stability. The null hypothesis was tested using Dynamic Ordinary Least Squares (DOLS) for estimation of effects. The finding revealed that tobacco tax has a positive and statistically significant effect on the Human Development Index in Nigeria (? = 0.000079; p = 0.0000). In conclusion, revenue from tobacco taxation not only generates fiscal resources but also contributes to measurable improvements in the quality of life reflected in education, health, and income dimensions of human development. The study recommends that the Federal Ministry of Finance should institutionalize periodic upward reviews of tobacco excise taxes and ring-fence a portion of the revenue for investments in education, healthcare, and income-support programs. This would ensure that the proven positive effect of taxation on HDI is not only sustained but also amplified through deliberate channeling of resources into the components that directly build human development.