IMPACT OF HEALTHCARE EXPENDITURE ON ECONOMIC GROWTH IN NIGERIA
Ibrahim Daniel Musa, E. D Anzaku, PhD and H. A. Eggon, PhD
Volume 4 Issue 1
Abstract
The study investigates the impact of healthcare expenditure on Nigeria's economic growth from 1990 to 2022. The specific forms of healthcare expenditure explored include healthcare Capital expenditure, healthcare recurrent expenditure, healthcare insurance expenditure, Healthcare out-of-pocket expenditure, and Healthcare external fund expenditure. The study employed a variety of econometric techniques such as trend analysis, unit root test, cointegration test, and autoregressive distributed lag (ARDL) and Granger causality models, to scrutinize the long-run relationships between the variables. Post-estimation tests were carried out to ascertain the robustness of the results. The findings indicated that Healthcare capital expenditure and healthcare external fund expenditure had a significant positive impact on economic growth. In contrast, recurrent health expenditure, healthcare insurance expenditure, and Healthcare out-of-pocket expenditure did not significantly influence economic growth. The policy implications derived from these findings suggested several specific recommendations. For Healthcare capital expenditure, policies should have been enacted to encourage investment in healthcare infrastructure. Recurrent costs needed scrutiny for potential inefficiencies or misappropriations. Despite its insignificance to economic growth, health insurance is crucial for shielding individuals from rising health expenses, necessitating improvements to the health insurance system. Out-of-pocket expenses should have been minimized through strategies enhancing prepaid health financing mechanisms. Lastly, the significance of external health fund expenditure highlighted the importance of maintaining strong international partnerships and effective utilization of foreign health aid. The study contributed to the understanding of how different forms of healthcare expenditure impacted economic growth in the context of a developing country like Nigeria. This information was crucial for policymakers and health economists in formulating strategies that maximized the economic benefits of healthcare expenditure. Further studies could have extended this research by examining other potential mediators and moderators of this relationship. Key words: Healthcare Expenditure, Economic Growth, Autoregressive Distributed Lag (ARDL)
Download Paper