Implication of Government Health Expenditure for Human Capital Development in Nigeria

The relationship between government health expenditure and human capital development has been widely discussed. It is a known fact that the more the health sector is funded, the more healthy people would be and this would enable them to invest in themselves and increase human capital. However, the health sector’s funding in Nigeria is low and has not helped to improve the development of human capital. It is for this reason that this study examined the impact of government health expenditure on human capital development spanning 1999 to 2023. The data for the annual time series were obtained from the Central Bank of Nigeria Statistical Bulletin 2023, and World Development Indicator 2023. The study adopted the vector error correction model (VECM) as an appropriate method of analysis. The results however found that government health expenditure and out-of-pocket expenditure have positive and significant impact on human capital development. Similarly, physician per capita and inflation rate are insignificant and negative with human capital development, meaning these two variables cause decline in human capital development during the period covered in the study. The results of the analysis made this study to recommend that there is the need for the government to increase health sector’s funding to aid the building of state-of-the-art health facilities that would help the development of human capital in Nigeria.