Ninth International Conference on Health, Wellness & Society

Abstract

This study investigates the causal linkages amongst public expenditure on health, health status and economic growth in Nigeria using the Toda-Yamamoto technique. The choice of Toda-Yamamoto approach lies on its simplicity and the ability to overcome the shortcomings inherent in the conventional causality procedures by producing more robust results through the estimation of the augmented VAR that guarantees the asymptotic distribution of the Wald statistic. To this end, the study collected annual time series data from the Central Bank of Nigeria’s Statistical bulletin and the World Development Indicator on public expenditure on health, life expectancy, infant mortality and real gross domestic product spanning 38 years from 1981 to 2018. The result of the study’s empirical analysis based on the co-integration test indicates that public health expenditure, health status, and economic growth have a long-run association. Further, the Toda-Yamamoto causality test result reveals the absence of causality between health expenditure and health status, health status, and economic growth are not causally interdependent. Similarly, public health expenditure and economic growth have no causal linkages. However, life expectancy and infant mortality exhibited bi-directional causality. Based on the findings, the paper vehemently concluded that efforts to stimulate economic growth by targeting health outcomes improvement through public expenditure would be futile. As such, the government in partnership with the private sector and international organizations should develop better national health policy and programs that are capable of integrating the health sector into the mainstream of the Nigerian economy.