Public Expenditure on Education and Healthcare in Nigeria: Who Benefits and Why?

Uzochukwu Amakom

doi:10.5539/ijbm.v7n12p48

Abstract

People routinely expect their government through public policy to reduce poverty and inequality, and publicspending is one way a policy maker works towards achieving such important task. Education and healthcareprovision have been suggested as key sectors that help every policy maker achieve the above objective. Thestudy evaluated public spending efforts in reducing inequality and poverty at all levels of these two sectors usingthe Benefit Incidence Analysis (BIA) in Nigeria. Findings from the study suggest that primary education andhealthcare were more pro-poor in absolute terms than tertiary education and healthcare. Secondary education andhealthcare reveal mixed results, while the findings suggest location bias in benefits from public spending forboth education and healthcare. The study findings therefore, imply that subsidising government services canhave more positive effect on income distribution if properly done than direct consumption or income transfers.

Highlights

Introduction and the ProblemThe incidence of public spending is crucial for efficient targeting which has become increasingly important in the current era of macroeconomic reforms as most governments are under pressure to reduce their total expenditure due to growing deficits
The major findings of the study revealed an absolute progressivity for primary education in Nigeria, progressivity for primary healthcare while tertiary education and healthcare were regressive from the federal, regional and state public spending
The finding of absolute progressivity for primary education should be taken with a pinch of salt because benefit incidence says nothing about the standard/quality of public primary education in Nigeria as well as coverage

Summary

Introduction

The incidence of public spending is crucial for efficient targeting which has become increasingly important in the current era of macroeconomic reforms as most governments are under pressure to reduce their total expenditure due to growing deficits. It is important because if not well-targeted, such spending may not be able to achieve its goals; for this challenge to be met policy makers need information on the structure of the sector and it’s financing. If it is believed that investment in education and healthcare helps to improve the welfare of the poor, there is a need to look at who is benefiting from such spending for equity reasons. This is necessary because such information helps in digesting every government financial operations looking at the how this can help in achieving the overall goals and of equity and efficiency across sectors, locations as wells as gender

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Conclusion