Implication of the Rising Debt Profile and Dwindling Revenue for Nigeria’s Public Health Expenditure
Keywords:
Debt, Revenue, Health Expenditure
Abstract
This study investigated the implication of rising government debt and dwindling government revenue for public health expenditure in Nigeria, which is the study’s main objective. The study employed quantitative method of analysis, using the autoregressive distributed lagged (ARDL) model, as analytical technique. Aggregate government expenditure on health (proxy for public health expenditure) is the dependent variable, while debt, revenue and population (control variable) are the independent variables. Secondary data was used, sourced from Central Bank of Nigeria (CBN) and World Health Organisation (WHO). The main findings of the study are: the rising debt stock has negative, but insignificant impact on government health spending and aggregate government revenue’s impact on government health spending is positive, but insignificant also, while, population growth rate, has a negative and significant impact on government health expenditure. One of the key recommendations is that in order to protect health expenditure, Nigeria’s government at all levels should set borrowing rules (e.g. no borrowing unless in extreme circumstances such as recession, expected natural disaster etc.) if it must borrow and it should seriously avoid its debt turning into a burden.
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World Health Organisation (WHO), (2011). Health financing and social protection. Retrieved from www.who.int.en
Awoyemi, O.B., & Divine A.N. (2022). A causal assessment of Nigeria’s crude oil revenue, health expenditure and economic growth. International Journal of Energy Economics and Policy, 12(5), 420-424. https://doi.org/10:32479/ijeep.13318
Babaranti, M. (2016). Nigeria, health budget 2010-2016. Retrieved, 27 May 2019 from: mamaye.org/blog/nigeria-health-budget-2010-2016.
Baicker, K. & Staiger, D. (2005). Fiscal shenanigans and federal health care. The Quarterly Journal of Economics, 120(1), 345–386, https://doi.org/10.1162/0033553053327461
Behera, D.K., Mohanty, R.K., & Dash, U. (2019). Cyclicality of public health expenditure in India: Role of fiscal transfer and domestic revenue mobilization. International Review of Economics, 67, 87-110.
Behera, D. K., & Dash, U. (2018). The impact of macroeconomic policies on the growth of public health expenditure: An empirical assessment from the Indian states. Cogent Economics and Finance, 6(1). 1435443 https://doi.org/10.1080/23322039.2018.1435443
Berger, M., Reichmann, M.S., & Czypionka, T. (2020). Determinants of soft budget constraints: How public debt affects hospital performance in Austria. Social Science and Medicine, 249. https://doi.org/10.1016/j.socsimed.2020.112855
Bordignon, M. & Turati, G. (2009). Bailing out expectations and public health expenditure. Journal of Health Economics, 28(2), 305-321.
Clements, B., Coady, D., Shang, B., & Tyson, J. (2011). Healthcare Finances. Finance and Development, 48(1), 42-45.
Dickey, D. A., Jansen, D. W., & Thornton, D. C. (1991). A Primer on cointegration with an application to money and income. Review Federal Reserve Bank of ST. Louis, 73.
Fosu, A. K. (2007). The external debt-servicing constraint and public expenditure composition: Evidence from African economies. World Institute for Development Economics Research (WIDER) Research Paper No. 2007/36. http://hdl.handle.net/10419/63373
Fosu, A.K. (2008). Implications of the external debt – servicing constraint for public health expenditure in sub-Saharan Africa. Oxford Development Studies, 36(4), 363-377. https://doi.org/10.1080/13600810802455112
Global-Economy (2017). Nigeria: Health spending as percent of GDP. Retrieved 27 May 2017 from: www.globaleconomy.com/Nig.
Harris, R., & Sollis, R. (2003). Applied time series modelling and forecasting. Wiley: West Sussex.
Harrod, R.F. (1939). An essay in dynamic theory. Economic Journal, 49, 14-33. Reprinted in Harrod, R. F. (1972). Economic Essays, 2nd Edition, London: Macmillan.
Hassan, A. S. (2021). Asymmetric effects of oil revenue on government expenditure: insights from oil-exporting developing countries. OPEC Energy Review, 45(2), 257-274. https://doi.org/10.1111/opec.12203
Ifejeh, M. (2017). Nigeria’s grossly inadequate 2017 health budget. This Day, February 9, 2017.
Index-Mundi (2019). Nigeria: Health expenditure as a share of GDP. Retrieved 27 May, 2019 from: www.indexmundi.com/files/nigeria/health_expenditure
Lone, T. A.; & Lone, P. A. (2022). Does fiscal deficit, public debt, economic growth and energy consumption affect health expenditure in India: An empirical evidence based ARDL bound testing approach. International Journal of Happiness and Development, 7(1), 1-14.
Lora, E. & Olivera, M. (2007). Public debt and social expenditure: Friends or foes? Emerging Markets Review, 8(4), 299-310.
Ma, Y., Hu, M. & Zafar, Q. (2022). Analysis of the impact of external debt on health in an emerging Asian economy: Does FDI matter? Front. Public Health, 10, 824073 https://doi.org/10.3389/fpubh.2022.824073
Maggazzino, C. (2014). The relationship between revenue and expenditure in the ASEAN countries. East Asia, 31, 203-221.
Narayan, P. K. (2004). Reformulating critical values for the bounds F-statistics approach to cointegration: An application to the tourism demand model for Fiji. Department of Economics Discussion Papers, 2(4), Monash University, Victoria 3800, Australia-References-Scientific Research Publish.
Ojo, M. O. (1994). Africa’s debt burden in historical perspective. Economic and Financial Review, 32(2), 95-111
Pesaran, M. H., & Shin, Y. (1999). An autoregressive distributed lag modelling approach to cointegration analysis in S. Storm, (ed) Econometrics and economic theory in the 20th century: The Ragnar Frisch centennial symposium. Cambridge: Cambridge University Press.
Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationship. Journal of Applied Economics, 16, 289-326.
Said, R., & Abdullahi Sani. (2020). Relationship between Public Debt Burden and Health Expenditure in Sub-Saharan African Countries: The Role of Institutional Quality. Journal of Business and Social Review in Emerging Economies, 6(2), 493-502. https://doi.org/10.26710/jbsee.v6i2.1092
Statista, (2022). Health expenditure as a share of GDP in Nigeria. Retrieved 31 May, 2022 from: www.statista.com/statistics/1126
World Health Organisation (WHO), (2011). Health financing and social protection. Retrieved from www.who.int.en
Published
2024-03-06
Section
Articles
