Public Health Expenditure and Economic Growth in Nigeria: An Error Correction Model
Oladele O. Aluko
Department of Economics, Faculty of Social Science, University of Abuja, FCT, Nigeria
Aigbedion I. Marvelous *
Department of Economics, Faculty of Social Science, University of Abuja, FCT, Nigeria
*Author to whom correspondence should be addressed.
Abstract
This study examines the impact of public health expenditure on economic growth in Nigeria from 1995-2016. Time series data and econometrics tools were used to test for the stationarity, causality and co-integration while Ordinary Least Squares (OLS) and Error Correction Model (ECM) were adopted to estimate the long-run and short run impact of public health expenditure on economic growth in Nigeria The OLS regression result shows that there is a positive relationship between public health expenditure and economic growth in Nigeria at the long run. Similarly, the Error Correction Model (ECM) result shows that public health expenditure has short run impact on economic growth in Nigeria. This implies that public health expenditure has that potency to faster economic growth in Nigeria but government health expenditure and Corruption Perception Index have little or no significant impact of economic growth in Nigeria this may be due to inequitable availability of health care services, poor public and private partnership, poor physical infrastructure and equipment; poor human resources availability and management, inadequate drug supplies, high level of political interference, financial constraints and funds mismanagement, resource allocation and lack of effective regulation or legislation to mention few. Therefore, government should put in place monitoring and evaluation mechanism to ensure that the money released is utilised for the right projects in the health sector for effective health service delivery and for sustainable economic growth in Nigeria.
Keywords: Public, health, expenditure, economic growth, corruption perception index