Government recurrent health expenditure and economic growth relationship in Nigeria: A quantile regression perspective

Abstract

Government health expenditure has been recognized as a key determinant of economic growth, particularly in developing economies. This study, therefore, investigates the impact of government recurrent expenditure on health on economic growth in Nigeria using annual data from 1980 to 2024. The quantile regression technique was used to perform the data analysis. To enhance the robustness of the findings, the analysis controlled for some variables, including population, foreign direct investment, and exchange rate. The results show that government recurrent expenditure on health has a positive and statistically significant impact on economic growth across different economic growth quantiles. The impact is stronger at the lower and middle than at the higher growth quantiles. Exchange rate weakening constrains economic growth minimally at the lower but strengthens economic growth significantly at the higher quantiles of economic growth. Foreign direct investment exerts a weak and unstable impact on economic growth across different growth quantiles, while population has a positive and significant impact on economic growth, with the effect greater during low and moderate than during high economic performance. The findings are robust to robustness checks. The study therefore recommends strengthening government recurrent expenditure on health in Nigeria to enhance its benefits in terms of improving the country’s economy at all levels of economic performance.