Can Public Health Expenditure Influence National Productivity in an Agrarian Economy? Evidence from Nigeria

Abstract

Despite the nation’s wealth in natural and human resources, productivity measure in Nigeria has not been satisfactory. Several factors have been alluded to be responsible for this. This paper investigated the impact of public health expenditure (with gross capital formation and secondary school enrolment as control variables) on national productivity (real GDP divided by working population as proxy) in Nigeria between 2000 and 2020. The theoretical foundation was based on Solow Neo-classical and Romer Endogenous growth models. The unit root test showed that variables were stationary at level. The descriptive result shows significant fluctuations in government domestic expenditure on health with an average of 18% of total health expenditure. Regression results showed a significant and positive relationship between healthcare service expenditures and productivity in Nigeria. The study recommended that Nigerian health policies should focus on developing the domestic health sector by increasing yearly budgetary allocation to the sector.