The linkage between economic growth, debt servicing, pollution and health expenditures: panel evidence from 42 African countries

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PurposeThis study aims to examine the determinants of public healthcare spending in Africa, focusing on the impact of pollution, debt servicing, birth rates, life expectancy, GDP per capita and urbanization.Design/methodology/approachWe employed the fixed effect, IV GMM estimation and panel data of 42 African countries from 2000 to 2021 to examine the association between real GDP per capita, crude birth rate, debt servicing, CO2 emissions, population, urbanization and government healthcare expenditures.FindingsThe study result indicates that real GDP per capita, CO2 emissions and public debt servicing are the main determinants of government health expenditures in Africa. We again observed that income per capita and crude birth rate strongly impacted healthcare spending in upper-middle-income African countries more than in low- and middle-income countries. Additionally, CO2 emissions have a more profound impact on healthcare spending in middle-income countries than in lower-income and upper-middle-income countries. Lastly, the association between debt servicing and health care expenditure is stronger for lower-income countries in Africa than for lower-middle- and upper-middle-income countries.Practical implicationsThe outcome of this study has significant implications for macroeconomic and health policy not only for African economies but also for other developing and emerging economies. We suggest that African leaders adopt policies that lead to sustained growth in real GDP per capita, thereby stimulating healthcare spending. Governments should prioritize policies that curb CO2 emissions and continue to remain creditworthy to external lenders to secure more funds needed to boost health infrastructure spending.Originality/valueWhile numerous studies have delved into the determinants of health expenditure, their focus has predominantly been on OECD and developed countries. Unfortunately, only a few studies have been done on African countries. Recent studies on the topic are scarce. The few recent studies on Africa related to the paper all seem to analyze how public healthcare expenditures affect health outcomes such as under-five mortality, life expectancy and maternal mortality. Our study is among the few studies analyzing the determinants of public healthcare expenditure in Africa.