IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
Vol. 1 No.8 2015

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Any Nexus between Public Health Expenditure and Economic Growth in Nigeria?

Ibe, Reginald Chijioke & Olulu-Briggs, Omiete Victoria

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Abstract

This study investigated the impact of public health expenditure on economic growth in Nigeria between 1981 and 2013. Data was sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin and Annual reports of various issues. The stationarity of the variables were tested using the Augmented Dickey-Fuller (ADF) unit root test. The ordinary least square (OLS) multiple regression, equation estimation, Johansen multivariate cointegration and Granger Causality analytical techniques were the econometric methods used to analyze the data. Results indicate a significant and positive long run relationship between public health expenditures and economic growth. There was a unidirectional causality between economic growth proxied by GDP and all public health variables in the model namely; Gross Capital Formation (GCF), Total Education Expenditure (TEE) and Total Health Expenditure (THE). The major policy recommendation that emerged from the study is the need for Nigerian policy makers to pay more attention to the health sector and increase its budgetary allocation. Nevertheless the key to good results lies in establishing a strong institutional system that, to the extent possible, links specific expenditure and revenue decisions so as to ensure the usage of the allocated fund as transparently as possible.

keywords:

Cointegration, Capital Formation, Unit Root, Causality, Regression

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