A Panel Analysis of Health Expenditure and Economic Growth in ECOWAS Countries - Research

Diseases such as HIV/AIDS, malaria, tuberculosis, and Ebola, among others have plagued the West African region. Although studies have been carried out on the relationship between health expenditure and economic growth in selected countries in West Africa, this current study brings all the countries in the region together. The main purpose of this study is to empirically examine the relationship between health expenditure and economic growth in the member-nations of the Economic Community of West African States(ECOWAS) for the period 1995 to 2014. The panel cointegration approach and the Toda and Yamamoto causality test are utilised as modelling techniques. There is a positive relationship running from gross domestic product per capita, life expectancy, and population growth and health expenditure per capita, while a negative relationship ex infant mortality rate. Gross domestic product per capita is positive and statistically significant, while infant mortality rate is negative and statistically significant. Although life expectancy and population growth are positive, they are insignificant. The outcome of the Toda and Yamamoto causality test showed that there is bidirectional causality between health expenditure and gross domestic product per capita. The coefficient of gross domestic product per capita is less than one unit, which means that health expenditure in the region is a necessity, and not a luxury. This study recommends that the governments of these countries should invest more in their economic growth, as this will in turn stimulate investment in their health sectors.