The Contribution of Nigeria Health Sector Recurrent Spending on Its Output (1961-2012)

Abstract

Health sector in any country has been recognized as the primary engine of growth and development. This study makes a modest contribution to the debates by empirically analyzing the contribution of Nigeria Health sector recurrent spending on its output using time series data from 1961 to 2012, obtained from the Central Bank of Nigeria. It employs the Ordinary Least Square (OLS) regression technique and Pair wise Granger Causality tests. The estimation reviews that Political Stability (PSB) and Consumer Price Index (CPI) in Nigeria have positive effect on Total health output (HGDP) while Total Government Recurrent Expenditure on Health (TGREH) has a negative effect on Total health output (HGDP). On the contrary, rising Government recurrent expenditure on health does not results to an increase in Total health output. Based on the result of granger causality, the paper concludes that a very weak causality exist between the two main variables used in this study. The authors therefore advised that there should be a reduction in government recurrent expenditure in the health sector. Also there should be a high degree of transparency and accountability in government spending.