The Impact of Health Expenditures on Health Outcomes in Sub-Saharan Africa

Abstract

This article investigates the core macroeconomic and social determinants of health expenditures as well as the effect of health expenditures on select critical health outcomes (life expectancy, under-five mortality and maternal mortality) in recent years in sub-Saharan Africa (SSA). The study utilizes data on 46 sub-Saharan African countries covering the period 2000–2015. The results indicate that gross domestic product (GDP) per capita, physician per 1,000 population, population aged above 65 years and under-five mortality rate are the most significant determinants of health expenditure in the region. Overall, health expenditure is less income-elastic, not rising as a portion of GDP in wealthier nations. Health expenditure was found to exert a positive and significant impact on all three health outcomes. Specifically, a 1 percent increase in health expenditure per capita resulted in a 0.5 percent reduction in under-five mortality and a 0.35 percent fall in maternal mortality, while improving life expectancy by 0.06 percent. The results suggest that steady increases in health expenditures over time have the tendency to improve health outcomes in SSA.