Determinants of Public Health Care Expenditure in Nigeria: An Error Correction Mechanism Approach (1981-2014)

Abstract

Investment in human capital through health could bring about economic growth in Nigeria. Health enhances worker effectiveness and the productivity of an individual through increase in physical and mental capacities which are necessary for economic growth and development. Base on this paradigm, the Nigeria government has devoted huge budgetary allocation to the health sector but this huge heath expenditure fails to translate into better health status of Nigerian and to meet World Health Organization(WHO) recommended budgetary allocation to the health sector. The main focus of this study is to empirically analyze the determinants of public health expenditure in Nigeria using the error correction techniques and time series data spanning from 1981 to 2014 to evaluate the factors that influence public health expenditure in Nigeria, the results show that demand for health in Nigeria is price inelastic. It also shows that total population, Unemployment rate and the Tuberculosis are the major determinants of health expenditure in Nigeria while gross domestic product per capita, Sickle-Cell Anemia and the Human immuno-deficiency Virus are insignificant. To this end, the study recommends that government should put in place adequate spending on health at all level  (primary, secondary and tertiary institution). Government budgetary allocation to health sector should be increased to the prescribe of 15% of its annual budgetary allocation to the health sector. This will make government health expenditure to have a robust effect on Nigerians health status and meet WHO report(2004) recommended budgetary allocation to the health sector. The study also recommended that there is need for government to take cognizance of the growth population of  her citizenry , prevalent rate of deadly diseases and the rate of unemployment in health care expenditure and allocation policies and also, government should form synergy with the private sector in providing quality and quantitative health facilities to meet the demand of Nigerians in line with the Millennium Development Goal (MDGS). 

Keywords: Determinants, Public Health Care, Health Sector, WHO, Nigeria