The Connection between Oil Revenue, Health Expenditure and Nigerian Economic Growth (1980-2020)

Abstract

This study attempts to examine the nature of the relationship between Oil Revenue, Health Expenditure and Nigerian Economic Growth. The nexus between these variables has come under scrutiny as mixed evidences have been found in the literature about their contribution to the Nigerian economic growth within the study period. The study made used of ARDL and Bound Co-integration test to analyze the short and long run relationships between the variables. The results show that the co-efficient of determination (R2) indicates that about 99.8% of the variations in RGDP is explained by the independent variables. Long-run dynamics of the relationship between real gross domestic product and the independent variables are LTHEX, LORE, INF and MS. There is no significant relationship between LRGDP and LORE, LTHEX, LMS and INF which indicate that no long run relationship exists among the variables in the model. Short-run dynamic model estimated in this study shows that ECT (-1) value is negative and significant at 1% level of significance. The negative and significant value of the error correction term which is -0.070 (p = 0.0016) indicates that the model is stable at 1% significance level. The Study recommends among other things that the Federal Government should increase the pay pegged to the work hours of nurses and doctors in Nigeria, increase the availability of health workers and subsidize usage of healthcare facilities so as to enable more people to contribute to Nigeria’s economic growth.