HEALTH INDICES AND ECONOMIC GROWTH OF NIGERIA FROM 1990-2020
- Project Research
- 1-5 Chapters
- Quantitative
- Regression
- Abstract : Available
- Table of Content: Available
- Reference Style: APA
- Recommended for : Educators
- NGN 3000
Background to the study
The effect of health on worker‘s productivity suggests a relationship between health and aggregate output. Healthy workers lose less time from work due to ill- health and are more productive when working. Health gains had the economic consequences of widespread economic growth and an escape of ill-health traps in poverty (World Health Organization, 1999). There has been a growing interest to extend the relationship between health and economic growth, catalyzed in considerable extent by a 1993 World Bank report on health (World Bank 1993). Barro (1996) assert that, health is a capital productive asset and an engine of economic growth. Fifty percent of economic growth differentials between developed and developing nation is attributable to ill-health and low life expectancy (World Health Organization, 2005).
The relationship between human capital and economic growth has received generous enquiries in the literature. The significance of Human capital in achieving sustainable economic Growth has been documented. Growth theories suggest the role of human capital in achieving significant growth in the economy. The economic view of human capital encompasses education, health, training, migration, and other investments that enhance an individual’s productivity. Outcome from several studies seem to suggest that there is a positive correlation between health status and sustainable economic growth. The wide acceptance of this nexus prompted the prominence of health outcome in the Millennium Development Goals (MDGs). In fact three of the goals are health specific while the others can also be regarded as health enhancing. Thus, the development of human capital becomes more important in many resource constraint countries like Nigeria. The opportunity costs of spending on health is very high and thus the need for a justification on the increase or otherwise of health spending in Nigeria. Incidentally, Nigeria is among the developing nations with poor health outcomes and its attendant problems. The health status of Nigeria is still considerably low and exists below that of some countries in West Africa. Low life expectancy at birth, high infant and maternal mortality rates, malaria and tuberculosis afflictions are some of the characteristics features of the Nigeria`s health status. Life expectancy at birth in Nigeria was estimated at only 48 in 2007, compared with 56 in Ghana.
This is complemented by the high numbers of women who die of complications during pregnancy or childbirth. Although the global maternal mortality ratio of below 400 maternal deaths per 100 000 live births in 2008, the maternal mortality ratio for Nigeria was 1100 per 100 000 live births, still on the high when compared to 560 and 910 in Ghana and Guinea respectively. The prevalence of HIV/AIDS among adults aged 15 and above infection has contributed significantly to Nigeria’s low life expectancy (WHO, 2010). It was estimated at 2,886 per 100,000 people. It is above the Prevalence rate in Ghana (1722), but below that of Cameroun (4580). Also, the per capital income in Nigeria is low, with more than half of the population leaving below the poverty line. Thus, provision of adequate funding for health care either by the household or the government remains difficult.
Most of the literatures that have incorporated human capital in the growth studies, tends to Paid greater attention on analysing the impact of education on economic growth, while ignoring the role of health human capital. It is only in very recent times that studies have started looking at health and tried to estimate the relationship between health status and economic growth. There exists a two-way relationship between improved health and economic growth. Health and other forms of human and physical capital increases the per capita GDP by increasing productivity of existing resources coupled with resource accumulation and technical change. Furthermore, some part of this increased income is spent on investment in human capital, which results in further per capita growth. On the other hand, Economic development results in improved nutrition, better sanitation, innovations in medical technologies; all this increases the life expectancy, reduces the infant mortality rate. Akram (2008).
Developed countries invest a substantial proportion of their budgetary allocations on provision of health care because they are convinced that their residents‘ health can serve as a major driver for economic growth. As health is wealth, no amount spent on health by a nation is considered too much. The United Nation (UN) recommended for a country, an average of 8 to 10 percent of the GDP as benchmark expenditure on health. Governments in Nigeria, over the years have made deliberate efforts at ensuring that there is increase in the level of public expenditure on health according to an in-depth and trend analysis investigation conducted in some years back. This is because of the importance of health to nation building and as a facilitator of economic progress. It should however be noted that despite the increase in government expenditure on health provisions in Nigeria, the contribution of this to human health is still marginally low. Moreover, the extent and magnitude of its impact on economic growth is yet to be adequately investigated probably because of the general unidirectional impression that economic growth facilitates better health. Off course, for example, economic growth could lead to increased availability of food for better healthy living; increased earning which makes health spending more affordable; and also raises demand for good health services. Higher growth could also imply higher public revenue which can translate into higher investment in health infrastructure. Therefore, there is a question of whether causality exists in the reverse direction? In other words, does improved health lead to higher growth? If yes, then to what extent and in what magnitude does health contribute to economic growth especially when one accounts for other potential factors that are empirically known to drive growth? It is therefore likely that causality exists in both directions. However, the question of which direction dominates could be an area of interest for further studies. Therefore, this paper seeks to evaluate the growth impact of health expenditure to determine the extent and magnitude of its contributions to the Nigerian economy from 1990 to 2020.
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