IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL. 7 NO. 1 2022

---

External Capital flows and Health Sector Development in Nigeria

Dennis Brown Ewubare & Esther Chimekwa Oriji

---

Abstract

The growing concern on the poor state of health facilities in Nigeria necessitated the investigation of how external capital flows helped in supporting healthcare development in the country. The specific objectives are to examine the effects of FDI, official development assistance (ODA), workers’ remittances, external debt servicing and domestic investment on investment in the health sector. The data for the variables were obtained from the CBN Statistical Bulletin and World Development Indicators, and analyzed using descriptive statistics, ADF unit root test, bounds cointegration test and ARDL method. The unit root test showed evidence of mixed integration in the variables and the bounds cointegration test showed long run relationship among the variables in each of the models. The result showed that FDI is positively related to health sector investment in Nigeria. This finding explains the important role external resources play in the process of health care development. At the same time, the results showed that ODA and workers’ remittances impacted positive on health sector investment. The implication of this finding is that increased inflows of migrants’ remittances support the efforts of the government in development the Nigeria’s health sector. The results further revealed that the short term impacts of domestic investment on healthcare expenditures are positive and significant. Given the findings, this study recommends among others that government should provide an enabling environment through improvement in the easy of doing business to ensure that Nigeria remains choice destination of FDI to create opportunities for the development of the health sector in Nigeria.

keywords:

External capital, health sector, development, FDI, ODA, workers’ remittances

---

References:

Alfaro, L., Kalemli-Ozcan, S., & Volosovych, V. (2008). Why doesn't capital flow from rich to
poor countries? An empirical investigation. The review of economics and statistics, 90(2),
347-368.

Ewubare, D. B. (2019). Impact of economic planning on sustainable development in
Nigeria. Asian Development Policy Review, 7(1), 12-22.

Ewubare, D. B., & Ezekwe, C. I. (2017). Trade liberalization and capital flows in Nigeria: A
partial equilibrium analysis. IOSR Journal of Economics and Finance (IOSR-JEF), 8(4),
20-34.

Ezirim, C. B., Anoruo, E., & Muoghalu, M. I. (2006). The Impacts of external debt burden and
foreign direct investment remittances on economic growth: empirical evidence from
Nigeria. African Economic and Business Review, 4(1), 25-47.

Fasanya, I. O., & Onakoya, A. B. (2012). Does foreign aid accelerate economic growth? An
empirical analysis for Nigeria. International Journal of Economics and Financial
Issues, 2(4), 423-431.

MacDougall, C. D. (1958). A working concept of public relations. Avaialble
online:ww.ideals.illinois.edu/bitstream/handle/2142/5812/librarytrendsv7i2c_opt.pdf

Mohamed, M. R., & Mzee, S. S. (2017). Foreign Aid and Human Welfare: A Quantile
Regression Approach. International Journal of Economics, Management and
Accounting, 25(1), 27-41.

Nkoro, E., & Furo, A. O. (2012). Foreign capital inflows and economic growth in Nigeria: An
empirical approach. Academic Journal of Interdisciplinary Studies, 1(2), 55-65.

Ogbuagu, A., & Ifionu, E. (2015). Causality between capital flow, human capital development
and economic growth: A case of Nigeria. International Journal of Financial
Research, 6(3), 116-134.

Phillips, P. C., & Perron, P. (1988). Testing for a unit root in time series
regression. Biometrika, 75(2), 335-346.

Rahman, J. (2008). Current account developments in new member states of the European Union:
Equilibrium, excess, and EU-phoria. International Journal of Economics and Finance,
7(2). 178-185.

Tressel, M. T., Reinhardt, D. B., & Ricci, M. L. A. (2010). International capital flows and
development: financial openness matters. International Monetary Fund.

Uwubamwen, A. E., & Omoruyi, A. (2018). International Capital flows and development-
financial Openness matters: empirical evidence from Nigeria. Benin journal of social
sciences, 144-156.

DOWNLOAD PDF

---

Back