GOVERNMENT CURRENT HEALTH EXPENDITURE AND ECONOMIC GROWTH IN NIGERIA

Abstract

This study investigated the impact of government current health expenditure on economic growth in Nigeria from 2000 to 2020. Using the Fully Modified Ordinary Least Squares (FMOLS) regression technique and the Granger causality test, the study assessed the effect of health expenditure on economic growth and the direction of causality between the two. The results showed that current health expenditure had a positive and significant impact on economic growth. Additionally, the study found a unidirectional causality from health expenditure to economic growth, with no feedback effect. Regarding the control variables, per capita income and credit to the private sector were found to significantly enhance economic growth, while the exchange rate and inflation rate had a deterring effect, though the exchange rate was not significant. Based on these findings, the study recommended that the government increase health expenditure to improve health outcomes, which would in turn boost productivity and spur growth. It also emphasized the importance of raising per capita income and facilitating access to credit for the private sector, alongside maintaining exchange rate and price stability.