Health Expenditures and Social Sustainability in Nigeria: A Disaggregated Grossman Analysis of Short-Run Gains and Long-Run Paradoxes

<ns3:p>Background Global health expenditure has increased dramatically in the past decades, yet poor health outcomes in many emerging markets, including Nigeria, pose efficiency and sustainability questions in health financing. Nigeria exemplifies such paradox: with increased health spending, life expectancy has declined, while infant mortality is elevated, jeopardising Sustainable Development Goal 3 (Good Health and Well-being) attainment. This research examines how disaggregated health financing segments: health expenditure per capita, recurrent health expenditure, capital health expenditure, and out-of-pocket health spending (OPHS) impact social sustainability indicators in the form of life expectancy, and infant mortality. Methods By utilising annual time series from 1990-2023 through the use of an Autoregressive Distributed Lag (ARDL) panel to address potential endogeneities, short- as well as long-run impacts are accounted for. Results Results indicate that per capita, recurrent and capital expenditures are significant in enhancing life expectancy in the long run, whereas all the financing segments are absent from having any statistically significant long-run impact on infant mortality. Paradoxical short-run mortality increases are observed in relation to increased recurrent as well as capital expenditures, which is indicative of inefficiencies as well as misappropriation. OPHS has mixed short-run impacts, as well as is insignificant in the long run, which accentuates its regressive burden. Conclusions The study concludes that financing volume alone is insufficient; expenditure composition, governance, and institutional reforms are critical to achieving socially sustainable health outcomes. Policy recommendations include reducing OPHS reliance, prioritising primary healthcare, and embedding sustainability principles in health financing so as to align Nigeria’s health system with SDG 3 targets by 2030.</ns3:p>