International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Determinants of Public Health Care Expenditure in Nigeria: An Error Correction Mechanism Approach
Imoughele, Lawrence Ehikioya; Ismaila, Mohammed

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 meet World Health Organisation (WHO) recommended budgetary allocation to the health sector. This study empirically examines the determinants of public health expenditure in Nigeria. Using the error correction techniques and time series data from 1986 to 2010 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 that total population of 14 Years of Age and Younger and health expenditure share in gross domestic product (proxy for government developmental policy on health) are the major determinants of health expenditure in Nigeria while gross domestic product per capital, unemployment rate, Population per Physician, consumer price index and political instability 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 recommended budgetary allocation to the sector. The study also recommended that there is need for government to take cognisance of the growth population of Nigerian 14 Years of Age and Younger in health care expenditure and allocation and 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).

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