The Impact of Health Expenditure on the Economic Growth in Sub-Saharan Africa

This paper examined the nexus between health care expenditure and economic growth in Sub-Saharan Africa over the period 1995-2014. We use the system General Method of Moments (GMM) technique to estimate the results. The findings reveal the existence of a positive and a statistically significant relationship between the two variables, precisely; health expenditure has a significant impact on the economic growth of the region. Regarding the control variables, while the effect of official development assistance on economic growth is insignificant, foreign direct investment, the active population and gross domestic savings appear as key determinants of economic growth in the region. Additionally, the results show that health care is a necessity rather than a luxury in Sub-Saharan Africa. It is therefore necessary to develop effective and efficient health care programs, increase health expenditure, make an effective use of the young population and create better environment for foreign direct investment in order to foster economic growth in Sub-Saharan Africa.