Healthcare Expenditure and Economic Growth in Sub-Saharan Africa

Main Article Content

Birhanu Yimer Ali
Robert Moracha Ogeto

Abstract

This paper investigated the effect of health expenditure on economic growth in Sub Saharan Africa. The linear dynamic generalized method of moments instrumental variable (GMM-IV) was used on a panel data of 38 Sub-Saharan African countries over the period 2000-2016. Findings reveal that health expenditure significantly improves economic growth in Sub Saharan Africa. The separate effects of Public and private health expenditures have also shown a significant positive relationship on economic growth. In addition to health expenditure, other determinants like gross domestic saving, foreign direct investment, and labor force brought a statistically significant improvement on economic growth, whereas official development assistance has a statistically insignificant effect on economic growth. This study concluded that health expenditure is an important element in attaining improved economic growth in Sub-Saharan African Countries as it assured a healthy workforce and the country’s populace. Therefore, increasing the amount of health expenditure allocated to the health sector yields a better economy. More on, revising policies to improve gross domestic savings and foreign direct investment also assure a better economic growth.

Keywords:
Health expenditure, economic growth, GMM-IV, Sub-Saharan Africa.

Article Details

How to Cite
Yimer Ali, B., & Moracha Ogeto, R. (2020). Healthcare Expenditure and Economic Growth in Sub-Saharan Africa. Asian Journal of Economics, Business and Accounting, 13(2), 1-7. https://doi.org/10.9734/ajeba/2019/v13i230170
Section
Short Research Article

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