GOVERNMENT HEALTH EXPENDITURE, HUMAN CAPITAL DEVELOPMENT, AND ECONOMIC GROWTH IN NIGERIA
Faculty
Department
Year of Publication
Keyword
upload
Publication Type
Abstract
The relationship between government health expenditure, human capital development and
economic growth in Nigeria was explored in this study and the period of study was from 1981 to
2023. To find out the impact of government health spending on economic growth, to know its
impact on human capital development and to analyse the role of human capital development in
economic growth. The data are of annual time-series data that were sourced from Central Bank
of Nigeria Statistical Bulletin, the National Bureau of Statistics and also from World
Development Indicators. Economic growth was proxied by real per capita GDP, while
government spending on health and education was proxying government health expenditure and
human capital development, respectively. The study was conducted using descriptive statistics,
Augmented Dickey-Fuller (ADF) unit root test, Johansen cointegration test and Vector Error
Correction Model (VECM). The dynamic relationships among the variables were also examined
through the forecast error variance decomposition and impulse-response analysis. The first
difference of the variables was found to be stationary by the unit-root test and the cointegration
result verified the existence of long-run relationship between the variables. Estimated results
showed that government health spending negatively and significantly affected economic growth.
It also had a major adverse influence on human capital development. The ability of human
capital development, however, had a positive and significant impact on economic growth. The
error-correction coefficient found that about 6 per cent of the deviation from the long-run
equilibrium was corrected every year. The results indicate that – if there is a poor allocation of
public funds, poor monitoring and poor efficiency in the use of the funds – the result of an
increased health expenditure may not be the desired economic and human-capital outcomes. The
study, therefore, found that the provision of support to improve funding needs to be coupled with
an improvement in health and education service provision and delivery. It suggested ramp up and
continued investment in health and education, tighter budgetary control, better primary
healthcare facilities, better accountability in public spending and greater access to good quality
social services.
economic growth in Nigeria was explored in this study and the period of study was from 1981 to
2023. To find out the impact of government health spending on economic growth, to know its
impact on human capital development and to analyse the role of human capital development in
economic growth. The data are of annual time-series data that were sourced from Central Bank
of Nigeria Statistical Bulletin, the National Bureau of Statistics and also from World
Development Indicators. Economic growth was proxied by real per capita GDP, while
government spending on health and education was proxying government health expenditure and
human capital development, respectively. The study was conducted using descriptive statistics,
Augmented Dickey-Fuller (ADF) unit root test, Johansen cointegration test and Vector Error
Correction Model (VECM). The dynamic relationships among the variables were also examined
through the forecast error variance decomposition and impulse-response analysis. The first
difference of the variables was found to be stationary by the unit-root test and the cointegration
result verified the existence of long-run relationship between the variables. Estimated results
showed that government health spending negatively and significantly affected economic growth.
It also had a major adverse influence on human capital development. The ability of human
capital development, however, had a positive and significant impact on economic growth. The
error-correction coefficient found that about 6 per cent of the deviation from the long-run
equilibrium was corrected every year. The results indicate that – if there is a poor allocation of
public funds, poor monitoring and poor efficiency in the use of the funds – the result of an
increased health expenditure may not be the desired economic and human-capital outcomes. The
study, therefore, found that the provision of support to improve funding needs to be coupled with
an improvement in health and education service provision and delivery. It suggested ramp up and
continued investment in health and education, tighter budgetary control, better primary
healthcare facilities, better accountability in public spending and greater access to good quality
social services.
Supervisor(s)
co-supervisor