Macroeconomic Variables Uncertainty and Health Outcomes in Nigeria

Abstract

Abstract Macroeconomic variables uncertainty relationship with key sectors in nations’ economies for both emerged and emerging economies have been investigated. In Nigeria, an emerging country, there is dearth of studies that have related macroeconomic variable uncertainty to health system performance. This study thus, bridges the gap by examining the time series of macroeconomic uncertainty and health outcomes by employing the Autoregressive Distributive Lag methodology. The macroeconomic variables investigated in the study are the exchange rate, the inflation rate, per capita income and index of health outcomes. The annual data for these macroeconomic variables span from 1980 to 2019. Augmented Dickey Fuller is employed to ascertain the stationarity state of the engaged macroeconomic data, while cause and effect among the variables are determined using the Granger causality test. In all, the findings reveal that, among the macroeconomic variables, exchange rate uncertainty has substantial impact on health outcomes. Inflation though has significant p-value, its sign is contrary to expectations. While the causality between health outcomes and per capita income is bi-directional, it is one-directional with exchange rate and non-directional with inflation rate. Based on these findings, a key policy recommendation is that, an inward looking approach should be encouraged to seek healthcare inputs within the nation’s economy to substitute for the hitherto imported ones. By so doing, foreign currency demand will be greatly eased, and a gradual move towards economic diversification could begin.