The Effect of Private and Public Health Expenditure on Economic Growth in Sub-Saharan Africa

F. O. Yusufu, B. O. Awoyemi, K. J. Akomolafe
2021 Journal of Economics Management and Trade  
This study examined the relationship between health expenditure and economic growth in sub-Saharan Africa. The General Method of Moments (GMM) estimation technique was used and the data covered the period 2000-2019 for forty-six countries. The results of the difference GMM-1 and GMM-2 steps indicate that a 1% change in public health expenditure per capita (LPUHE_PC) is associated with a 0.1362% and 0.1521% rise in GDP per capita (GDP_PC) in the short run. The system GMM-1 and GMM-2 steps
more » ... e that a percentage change in LPUHE_PC is associated with a respective 0.0148% and 0.0109% rise in GDP_PC in the short run at a 1% level of significance, on average ceteris paribus. In the long run, the difference GMM-2 step indicates that a 1% change in the LPUHE_PC has a larger positive effect on the GDP_PC (1.34899%) than in the short-run (0.1521%). The result of the system GMM-1 and GMM-2 step indicates that a 1% change in LPUHE_PC has a larger positive effect on the GDP_PC in the long run (0.39967% and 0.24135%) than in the short-run (0.0148% and 0.0109%) respectively. This analysis indicates that a rise in government health spending will stimulate economic growth with a larger effect in the long run than in the short run in Sub-Saharan Africa. Thus, the government should increase health budgetary allocations.
doi:10.9734/jemt/2021/v27i1130375 fatcat:ppr2aqigmbfitkc6obgvzsorzy