Impact of Government Health Expenditure on Health Sector Growth in Nigeria

Abstract

Nigeria faces a persistent paradox: despite dedicating significant resources to healthcare, health sector growth and population health outcomes remain abysmal. in order to uncover potential deficiencies and inform future policy adjustments. This study assessed the impact of government expenditure on the health sector in Nigeria (1990–2022). The study made use of ex-post facto research and time series data. Autoregressive Distributed Lagged (ARDL) and Error Correction Model (ECM) method were used to examine the short-run and long-run impact and relation between health capital expenditure (HCE), health recurrent expenditure rate (HRE), per-capita income (PCI), and the health sector (proxied with life expectancy) in Nigeria. The study reveals that health capital expenditure (HCE) and health recurrent expenditures (HRE) with values of 0.084677, 0.029913, and probability values of 0.019 and 0.0000, respectively, were found to have a positive and significant impact on the health sector in Nigeria with a value of at a 5 percent significant level in the long run, but in the short run they have a negative, positive, and insignificant impact on the health sector, respectively. On the other hand, per capita income has a positive and significant impact in the short run, while with a value of 0.00269 and a probability value of 0.0089, it has a negative and significant impact in the long run on the health sector in Nigeria at a 5 percent significant level. Therefore, the study recommended that the government should prioritise allocating funds for infrastructure development, medical equipment procurement, and healthcare facility expansion. These investments will have a lasting positive impact on the health sector's capacity and quality of care. The government should strike a balance between addressing immediate needs through recurrent expenditures and investing in long-term health capital to ensure sustainable progress. The government should implement policies that promote economic growth, reduce poverty, and ensure equitable income distribution. By addressing these underlying factors, the government can contribute to improving overall health outcomes in the long run.