Impact of fiscal policy shocks on health outcomes in Sub-Saharan Africa: A panel structural VAR approach

This study investigates the impact of fiscal policy shocks on health outcomes in Sub-Saharan Africa (SSA). It is motivated by health systems’ increasing reliance on public funding despite growing macroeconomic uncertainties. This study adopts a regional analysis, sampling five countries with the highest per capita public health expenditure from the Central, Eastern, Southern, and Western African regions. The study employs the panel structural vector autoregression technique and expresses health outcomes as a function of fiscal policy and private health expenditure shocks. The results suggest that fiscal policy shock significantly and positively affects health outcomes in Central and Western Africa. However, health outcomes are resilient to fiscal policy shock in Eastern and Southern regions and to private health expenditure shock in all regions. The study indicates that achieving sustainable improvement in health outcomes in SSA would require policies designed to expand health financing options beyond the traditional public and private funding arrangements.