Public Health Financing, Remittances, and Inclusive Growth in Resource-rich Countries: Evidence from Nigeria and Mozambique

Sunday Osahon Igbinedion, Favoured Mogbolu


The persistent challenge of accelerating economic growth via government health expenditure has been widely acknowledged in extant literature. Though such government expenditures have impacted growth in some cases, but the desire to further stimulate growth has brought about the need to explore more options in that regard. Interestingly, remittance has evolved over time as an alternative. Yet, the relative impact of these two covariates in promoting inclusive growth in natural resource rich countries remains understudied in Africa.The study therefore examines the relative impact of both government health expenditure and personal remittances received on inclusive growth in the two resource-rich countries of Nigeria and Mozambique. Utilizing the Fully Modified Ordinary Least Square Method (FMOLS) and the error correction mechanism on time series data for each of the two countries, the results revealed that economic fundamentals like government health expenditure, personal remittances received, and per capita income are of considerable significance in the task of enthroning inclusive growth in theresource-rich countries of Nigeria and Mozambique.


Natural resources, remittance, growth, health, income.

Full Text:



Adeyemi, P.A.,&Ogunsola, A.J. (2015). The Impact of Human Capital Development on Economic Growth in Nigeria: ARDL Approach. Journal of Humanities and Social Science, 24(1), 34-41.

Agarwal, R.,&Horowitz, A. (2002). Are International Remittances Altruism or Insurance? Evidence from Guyana using Multiple-Migrant Households. World Development, 30(11), 2033-2044.

Ahmad, A. (2015). Workers’ Remittances and Economic Growth: Evidence from Jordan.European Scientific Journal, 11(25), 40-54.

Arısoy, İ., Ünlükaplan., İ., &Ergen, Z. (2010). The Relationship Between Social Expenditures and Economic Growth: A Dynamic Analysis Intended for 1960–2005 period of the Turkish Economy. MaliyeDergisi, 158, 398-421.

Barajas, A.,Chami, R.,Fullenkamp, C.,Gapen, M.,&Montiel, P. (2009). Do Workers Remittances Promote Economic Growth.International Monetary Fund Working Paper.WP09/153.

Barro, R.J.,&Salai-i-Martin, X. (1992). Regional Growth and Migration: A Japan – United States Comparison. Journal of the Japanese and International Economies, 6(4), 312-346.

Bloom, D., Canning, D., &Sevilla, J. (2004). The Effect of Health on Economic Growth: A ProductionFunction Approach. World Development, 32(1), 1-13.

Boachie, M. K. (2017). Health and Economic Growth in Ghana: An Empirical Investigation. Fudan Journal of the Humanities and Social Sciences, 10(2), 253-265.

Boachie, M. K., Ramu, K.,&Põlajeva, T. (2018). Public Health Expenditures and Health Outcomes: New Evidence from Ghana. Economies, 6(58), 1-25.

Breitung, J.,& Mayer, W. (1994). Testing for Unit Roots in Panel Data: Are Wages on Different Bargaining Levels Cointegrated? Applied Economics, 26, 353-361.

Chami, R, Fullenkamp, C.,&Jahjah, S.(2003). Are Immigrant Remittance Flows a Source of Capital for Development? International Monetary Fund(IMF) Working Paper 03/189.

Chami, R., Barajas, A., Cosimano, T., Fullenkamp, C., Gapen, M.,& Montiel, P. (2008). Macroeconomic Consequences of Remittances. IMF Occasional Paper No. 259.

Chauvet, L., Gubert, F., &Mesplé-Somps, S. (2008). Are Remittancesmore Effective than Aid to improve Child Health? In ABCDE Conference: 1-33

Chopra, V., Civilize, B.,& Frank, S.U. (2009). The Impact of Remittances on Infant Mortality in Mexico: A Research Design, Unpublished Manuscript.

De Mendonça, H. F., &Baca, A.C. (2018). Relevance of Corruption on the Effect of Public Health Expenditure and Taxation on Economic Growth. Applied Economics Letters,25(12), 876-881.

Drabo, A., &Ebeke, C. (2011). Remittances, Public health Spending, and Foreign Aid in the Access to Health Care Services in Development Countries. CERDI, Working Papers 2010.04

Engle, R.F. & Granger, C.W.J. (1987). Cointegration and Error Correction: Representation, Estimation and Testing. Econometrica, 55, 391-407.

Eryiğit, S.B., Eryiğit, K.Y.,&Selen U. (2012). The Long-run Linkages between Education, Health and Defence Expenditures and Economic Growth: Evidence from Turkey. Defence Peace Economics,23(6),559-574.

Fayissa, B.,&Nsiah, C. (2010).The Impact of Remittances on Economic Growth and Development in Africa. The American Economist, 55(2), 92-103.

Funkhouser, E., (1995). Remittances from International Migration: A Comparison of El Salvador and Nicaragua. Review of Economic and Statistics,77(1), 137-146.

Glytsos, N.P. (2005). The Contribution of Remittances to Growth: A Dynamic Approach and Empirical Analysis. Journal of Economic Studies, 32(6), 468-496.

Granger, C.W.J. &Newbold, P. (1977).Spurious Regressions in Econometrics.Journal of Econometrics, 2, 111-120.

Grossman, M. (1972).On the Concept of Health Capital and the Demand for Health. Journal of Political Economy,80(2), 223-255.

Halici-Tülüce, N. S., Dogan, I., &Dumrul, C. (2016). Is Income Relevant for Health Expenditure and Economic Growth Nexus? International Journal of Health Economics and Managements 16, 23-49.

Hall, S., Lazarova, S.,&Urga, G. (1999). A Principal Components Analysis of Common Stochastic Trends in Heterogeneous Panel Data: Some Monte Carlo Evidence, forthcoming in Oxford Bulletin of Economics and Statistics (November 1999).

Hashmati, A. (2001). On the causality between GDP and Health Care Expenditure in Augmented Solow growth Model. Stockholm: Department of Economic Statistics Stockholm School of Economics.

Ibe, R.C. &Olulu-Briggs, O.V. (2015).Any Nexus between Public Health Expenditure and Economic Growth in Nigeria.Iiard International Journal of Banking and Finance Research,1(8), 3-11.

Igbinedion, S.O. (2019). Oil Price Volatility and Infrastructural Growth: Evidence from an Oil-Dependent Economy. Oradea Journal of Business and Economics,4(1), 17-28.

Igbinedion, S.O. (2020). On Remittance and Inclusive Growth Nexus: Does Health-Oriented Official Development Assistance Matter? ActaUniversitatisDanubiusEconomica, 16(5), 25-37.

International Monetary Fund (IMF) (2009): Concepts and components.

Kar, M.,&Taban, S. (2003).The Impacts of the Disaggregated Public Expenditure on Economic Growth.Ankara University Faculty of Political Science, 53(3), 145-169.

Keghter, K.K., Oliver, E.O.,&Afemefuna A.E. (2020). Health Expenditure and Economic Growth Nexus in Nigeria: Does Institutional Quality Matter? Journal of Economics and Allied Research, 4(4), 2536-7447.

Lustig, N. (2006). Investing in Health for Economic Development: The Case of Mexico.UNU-WIDER Research Paper No. 2006/30.

Maddala, G. S., & Wu, S. (1999). A Comparative Study of Unit Root Tests with Panel Data and A New Simple Test, Forthcoming in Oxford Bulletin of Economics and Statistics (November 1999).

Matthew, J.O.,&Adeboye, G.J. (2015).Analysis of the Growth Impact of Health Expenditure in Nigeria. Economics and Finance, 3(1), 77-84.

Meyer, D.,&Shera, A. (2016). The Impact of Remittances on Economic Growth: An Econometric Model.Economia,18(2), 147-155.

Mohapatra, S. (2017).Economic Growth, Public Expenditure on Health and IMR in India: An Econometric Investigation of Causal Linkages. International Journal of Social Economics,44(12), 2002-2018.

Nembot, N. L., Melachio, T. A., & Kos, A. M. A. (2021). Effects of Public Expenditure on Economic Growth in the CEMAC Sub-Region: A Comparative Analysis between the Fragile and Non-Fragile States. AERC Working Paper FW-006, Nairobi.

Nyamongo, E.M., Misati, R.N., Kipyegon, L., &Ndirangu, L. (2012).Remittances, Financial Development,and Economic Growth in Africa. Journal of Economics and Business, Elsevier, 64(3), 240-260.

Ogundipe, M.A.,&Lawal, N. A. (2011).Health Expenditure and Nigerian Economic Growth.European Journal of Economics, Finance and Administrative Science, 30, 125-129.

Oguntomi, E.B.,&Igbinedion, S.O. (2021). Remittances Volatility and Health Sector Performances: Evidence from Nigeria. Sriwijaya International Journal of Dynamics Economics and Business,5(2), 111-130.

Olusuyi, A. E.,Adedeyi, O. A.,Giwa, B. A.,&Ebun, A. F. (2017). Dynamic Impact of Remittances on Economic Growth in Nigeria. Journal of Accounting and Financial Management,3(3), 26-36.

Organization for Economic Cooperation and Development (OECD) Health Data (2001): A Comparative Analysis of 30 Countries, OECD, Paris.

Phillips, P. C. B.,& Hansen, B. E. (1990). StatisticalInference in Instrumental Variables Regression with 1 (1) Processes. The Review of Economic Studies, 57(1), 99-125.

Piabuo, S. M.,&Tieguhong, J. C. (2017).Health Expenditure and Economic Growth – A Review of the Literature and Analysis between the Economic Community of Central Africa States (CEMAC) and selected Africa Countries. Health Economics Review,7(23), 1-28.

Quah, D. (1994). Exploiting cross-section variation for unit root inference in dynamic data. Economic Letters, 44(1-2), 9-19.

Ranieri, R., & Ramos, R.A. (2013). Inclusive Growth: The Building of a Concept. IPC-IG Working Paper, No. 104.Brasilia International Policy Centre for Inclusive Growth.

Rao, B. B.,& Hassan, G. M. (2011). A Panel Data Analysis of the Growth Effects of Remittances. Economic Modeling, 28, 701-709.

Sefa, A. C., Siew, L.Y.,& Mehmet, U. (2015). Effects of Government Education and Health Expenditures on Economic Growth: A Meta-Analysis. Greenwich Papers in Policy EconomyNo.GPERC 21.

Spatafora, N. (2005). Worker Remittances and Economic Development, World Economic Outlook, (Washington, D.C., International Monetary Fund).

Strauss, J.,& Thomas, D. (1998). Health, Nutrition, and Economic Development. Journal of Economic Literature, 36, 766-817.

Sutradhar, S. R. (2020). The Impact of Remittances on Economic Growth in Bangladesh, India, Pakistan, and Sri Lanka. International Journal of Economic Policy Studies 14, 275-295.

Wagstaff, A. (1986). The Demand for Health: Theory and Applications. Journal of Epidemiology and Community Health, 40, 1-11.

Wang, Z., Asghar, M. M., Zaidi, S. A. H., & Wang, B. (2019). Dynamic Linkages among CO2Emissions, Health Expenditures, and Economic Growth: Empirical Evidence from Pakistan. Environmental Science and Pollution Research, 26(15), 15285–15299.

Weil, D. (2007). Accounting for the Effect of Health on Economic Growth. The Quarterly Journal of Economics, 122(3), 1265-1306.

Williamson, C.R. (2008). Foreign Aid and Human Development: The Impact of Foreign Aid to the Health Sector. Southern Economic Journal, 75(1), 188-207.

World Bank (2022).World Development Indicators.

Yang, D. & Choi, H. (2007). Are Remittances Insurance? Evidence from Rainfall Shocks in the Philippines. World Bank Economic Review, 21(2), 219-248.

Yang, D. (2004). International Migration, Human Capital,and Entrepreneurship: Evidence from Philippine Migrants’ Exchange Rate Shocks. Ford School of Public Policy Working Paper Series, No. 02-011, University of Michigan, Ann Arbor

Ye, L., & Zhang.X.(2018).Nonlinear Granger Causality between Health Care Expenditure and Economic Growth in the OECD and Major Developing Countries.International Journal of Environmental Research and Public Health, 15, 1953.

Yumuşak, I.G.,&Yıldırım, D. C. (2009).An Econometric Examination over the Relation between Health Expenditure and Economic Growth.The Journal of Knowledge Economy and Knowledge Management, IV,7(23), 57–70.



  • There are currently no refbacks.

ISSN (Print) 2086-1575       ISSN (Online) 2502-7115

View My Stats


Creative Commons License
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.