Healthcare Expenditure and Economic Growth in Sub-Saharan Africa

Main Article Content

Birhanu Yimer Ali
Robert Moracha Ogeto


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.

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.
Short Research Article


Linda S, Laura A, Lesley D. USAID. Retrieved from Health Finance & Governance; 2019.
Available: [Last [Accessed on 2019 November 14]

Richardson KE, Chisolm E, Mary O. Public health expenditure and health outcomes in Nigeria. American Journal of Biomedical and Life Sciences. 2017;5:96-102.

World Bank. World development indicators. Washington D.C.: World Bank; 2016.

Aboubacar B, Xu DY. The Impact of Health Expenditure on the Economic Growth in Sub-Saharan Africa. Theoretical Economics Letters. 2017;7:615-622.

Anne C, Maduka CV, Chukwunonso SE. Health care expenditure, health outcomes, and economic growth Nexus in Nigeria: A Toda – Yamamoto causality approach. Unified Journal of Economics and International Finance. 2016;2(1):1-9.

Alhowaish AK. Healthcare spending and economic growth in Saudi Arabia: A granger causality approach. International Journal of Scientific & Engineering Research. 2014;5:1471-1474.

Kurt S. Government health expenditures and economic growth: A feder–ram approach for the case of Turkey. International Journal of Economics and Financial Issues. 2015;5(2,page):441- 447.

Serge MP, Julius CT. Health expenditure and economic growth -a review of the literature and an analysis between the economic community for central African states (CEMAC) and selected African countries. Health Economics Review. 2017;1-13.

Oni LB. Analysis of the growth impact of health expenditure in Nigeria. Journal of Economics and Finance. 2014;3:77-84.

Mankiw R, Weil. A contribution to the empirics of economic growth. Quarterly Journal of Economics. 1998;107:369-377.

Narayan S, Narayan PK, Mishra S. Investigating the relationship between health and economic Growth: Empirical evidence from a panel of 5 Asian Countries. Journal of Asian Economics, 2010;21:404-411.