The Dynamics of Health Outcomes, Government Spending, and Economic Growth in Nigeria

The recurrent expenditure on healthcare in Nigeria has shown a persistent increase over the years; however, this growth has not yielded a proportionate impact on the nation‘s economic development, presenting significant concerns for policymakers. This discrepancy suggests that governmental spending within the health sector may be inadequate for restoring Nigeria's economy to aggregate equilibrium. This study, therefore, investigates the interrelationship between government expenditure, health outcomes, and economic growth in Nigeria, utilizing data spanning from 1980 to 2021, sourced from the Central Bank of Nigeria, the National Bureau of Statistics, and the World Bank. Analytical approaches employed include descriptive statistics, trend analysis, correlation analysis, and the autoregressive distributed lag (ARDL) model, with real gross domestic product (GDP) serving as the dependent variable and eight additional factors as independent variables. The results indicate that the lag of real government recurrent expenditure exerts a positive and significant influence on economic growth in both short and long-term contexts. Additionally, while the lag of total government capital expenditure demonstrates a positive and statistically significant effect on long-term economic growth, this relationship lacks significance in the short run. The lag in health sector output similarly exhibits a positive and significant effect on economic growth across both time frames. Based on these findings, it is recommended that the government, at all levels, should prioritize adequate infrastructure provision, eliminate unnecessary projects, and enhance health sector expenditures to improve health outcomes and foster economic growth, ultimately minimizing the need for Nigerians to seek healthcare abroad.