Project Materials

PUBLIC HEALTH EXPENDITURE AND HEALTH OUTCOMES IN NIGERIA 1986-2016

Abstract

Conventional wisdom argues that health is essential to human well-being and a necessity for greater productivity, as well as total economic growth and development. This explains why governments around the world, including Nigeria, are working tirelessly to ensure excellent health for all citizens. Regrettably, despite the government’s efforts to enhance residents’ health status through substantial health-care spending, Nigerian health results (such as life expectancy and death rate) remain among the lowest and most wretched in the world. Thus, the study uses a causality method to investigate the relationship between government health expenditure, health outcomes, and economic growth in Nigeria from 1986 to 2016.

Chapter one

INTRODUCTION

1.1 Background of the study

Reforming the health-care delivery system is an important component of a country’s overall development. The most typical policy response to the desire for better healthcare is to raise public health expenditures.

However, given the complexity of health outcome factors, assuming a direct positive relationship between public health expenditure and health outcomes may be unrealistic.

Governments in developed nations with higher health indicators have significantly increased public health expenditures; nonetheless, the role of public spending in health care provision is frequently contested. Conventional wisdom argues that health is essential to human well-being and a necessity for greater productivity, as well as total economic growth and development.

Health is also a driving force behind other human capitals like education and skills. According to Oni (2014), healthier workers take less time off and are more productive at work.

According to WHO (2005), good health is the result of widespread economic growth and the escape from ill-health traps in poverty. According to Barro (1996), health is both a capital productive asset and a growth engine.

As a result, it is useful to consider how dramatically the world’s health has improved over the last several decades. In 1950, around 280 out of every 1000 children in poor countries died before their fifth birthday.

By the year 2000, the figure had dropped to 126 per 1000 in low-income nations, 39 in middle-income countries, and 6 in high-income countries (Todaro and Smith, 2006).

This is the outcome of the complete elimination of several critical deadly diseases such as small pox, as well as other major childhood ailments such as rubella and polio, thanks to the use of vaccines.

According to World Health Organisation statistics (2005), bad health and low life expectancy account for over half of the economic growth disparities between developed and developing countries. This is because industrialised countries spend a larger part of their GDP on providing health care services to their residents, whilst some emerging countries have wide variations in health care expenditure.

The findings also demonstrate that the performance of the health-care system varies greatly across income levels and countries. According to the same survey, rich and developing countries were ranked based on the percentage of money spent on health care. Singapore was placed sixth, Costa Rica was 36th, and Colombia, Chile, and Morocco were 22nd, 23rd, and 29th, respectively.

However, it is worth noting that all of these emerging countries outperformed the United States. This demonstrates that much may be accomplished with a minimal income. Despite Nigeria’s independence since 1960, the country’s economy has stagnated during the last two decades.

The petroleum-rich Nigerian economy, long hampered by political instability, corruption, and bad macroeconomic management, is undergoing significant economic change under the new civilian leadership.

Nigeria’s economy is striving to capitalise on the country’s huge resources in fossil fuels in order to alleviate the crushing poverty that plagues around 57% of the population.

Economists refer to the juxtaposition of immense natural resource richness and acute personal poverty in developing countries like Nigeria as the “paradox of plenty” or the “curse of oil”. Nigeria’s oil and natural gas exports, which occurred during peak prices, have allowed the government to post goods trade and current account surpluses in recent years.

According to Odusola (1998), the government receives 80 percent of Nigeria’s energy earnings, 16 percent covers operating costs, and the remaining 4 percent is distributed to investors.