Health Financing and Economic Growth in Nigeria

Abstract

This study examines the impact of the health financing on economic growth in Nigeria using Auto-regressive Distributed Lag Model (ARDL) estimation technique with time series data from 1990 – 2020. The results show that the previous year productive activities have a growth effect on economic growth both in the short-run and the long-run. The current domestic government general health expenditure has a negative growth effect on economic growth while the previous year domestic general government expenditure on health improves economic growth. Also, current out-of-pocket health expenditure negatively affect economic growth while previous year out-of-pocket health expenditure improves economic growth. The domestic private health expenditure has a significant positive growth effect on the economic growth. The result also strengthens the importance of private health spending than government health expenditure in improving economic growth. Therefore, it was concluded that health financing is necessary for sustainable economic growth. Hence, government should enhance individual health spending ability, increase health sector budgetary allocation and ensure prudent and effective budgetary implementation for the heath sector.