Health Expenditure and Economic Growth Nexus: A Generalised Method of Moment Approach for the Case of Selected Africa Countries

Abstract

This study empirically examined the impact of health expenditure on economic growth in 45 selected African countries over the period of 2000 to 2017. The study employed panel dynamic Generalised Method of Moment (GMM) techniques and the results of both differenced GMM and system GMM estimates showed that health per capita expenditure has positive and statistically significant impact on economic growth in Africa. Hence, health expenditure and provision of social services by governments at all levels in all countries should not be seen as a cost that need to be curtailed but rather as another means of achieving greater economic growth in the selected African countries. Therefore, the study recommends that governments and health related donor agencies should specifically increase the level their spending on community health and medical services as this may improve the efficiency and effectiveness in relation to prevention, diagnosis and treatment of diseases that hampered human capital development and consequently economic growth in Africa.