DETERMINANTS OF PUBLIC HEALTH EXPENDITURE AND ECONOMIC GROWTH IN NIGERIA

Abstract

This study examines the Trend analysis of public Health Expenditure and Economic growth in Nigeria using time series data for the period 1970-2013. The study was anchored on the Grossman Health Capital Model and Endogenous Growth model with demand for health as investment. The study employed the Augmented Dickey Fuller and Philips-Perron tests, Johansen and Juselius Multivariate Cointegration approach, Granger Causality test and Error Correction Model techniques. The result of the Granger causality test revealed that a unidirectional causality existed between health expenditure and economic growth running from economic growth to recurrent, capital and total health expenditures. Also, the cointegration test showed that there is a positive and long run relationship among health expenditure, gross capital formation, adult literacy rate, life expectancy and economic growth in Nigeria, and a negative relationship existed among under-five mortality, infant mortality and economic growth. The regression results further showed that gross capital formation, adult literacy rate, capital and total health expenditures were statistically significant in influencing economic growth within the study period. While infant mortality and under-five mortality notwithstanding their negative signs were statistically significant in influencing economic growth in Nigeria. Following from the result, the study recommended that government should raise the quality of labour force in Nigeria through training and re-training. Also, government should increase its funding of the health sector especially the capital infrastructures. Finally, government should carryout frequent routine immunization exercise to prevent child killer diseases.