The Impact of Health Expenditures on Economic Growth of Cameroon: A Literature Review Perspective

Abstract

Health expenditure consists of all expenditures or costs for medical care, prevention, promotion, rehabilitation, community health activities, health administration and regulation and capital formation with the predominant objective of improving health in a country or region. According to WHO (2015), globally in 2006, expenditure on health was about 8.7% of gross domestic product, with the highest level in the Americas at 12.8% and the lowest in the South-East Asia Region at 3.4%. This translates to about US$ 716 per capita on the average but there is tremendous variation ranging from a very low US$ 31 per capita in the South-East Asia Region to a high of US$ 2636 per capita in the Americas. This paper intends to shows that health expenditure is a fundamental determinant of economic growth of every nation and that increasing expenditure on health leads to higher growth rates. Cameroon should therefore endeavor to meet and surpass the target of the Abuja declaration of 2001. One possible measure that could be taken to raise funds to meet this target could be by increasing for examples taxes on products such as cigarettes and other products of ostentation and rechanneling the extra revenue generated to investment in healthcare. One of the important drawbacks to funding to Cameroon is poor governance, thus measures to assure a fluid target based expenditure is imperative. In countries where poor governance is alarming, as the World Bank states, increasing public spending both from external donors and the government does not necessarily lead to the desired development outcomes. (WHO, 2013) Performance based financing can be an important mechanism that potential donors and government agencies can use. It is also believed to increase transparency and accountability in achieving targets. (Meessen, Hercot, Noirhomme, Ridde, Tibouti, Tashobya et al. 2011) Meessen et al. also argues that it improves the allocative efficiency of resources especially in low-income developing countries like Cameroon where resources are quite limited. Thus an efficient financing mechanism with greater emphasis on the processes leading to the performance goal is then necessary and imperative. This paper attempts just to show the linkages between increasing health care expenditures and economic growth.