FINANCIAL DEEPENING AND HEALTH OUTCOME IN NIGERIA
Abstract
This study examined the influence of financial deepening on health outcomes in Nigeria from 1981 to 2023. The data used in this study came from reports by Nigeria's central bank and the World Bank, and included information on broad money supply as a ratio of GDP in %, private sector credit as a ratio of GDP in %, life expectancy, total government expenditure on health and inflation rate. This study employed an Autoregressive Distributed Lag - ARDL method to explore how these factors are associated in both the long and the short term. The results revealed that in both the long and short terms, the amount of credit given to the private sector as a ratio of GDP in percentage and the inflation rate have a negative and significant relationship with life expectancy. However, broad money supply as a percentage of GDP and total government expenditure on health have a positive and significant association with life expectancy. The study recommended that policymakers should strengthen financial deepening by expanding financial inclusion and improving access to formal financial services to enhance households' ability to finance healthcare expenditures and improve life expectancy. The apex bank in Nigeria should sustain monetary policies that promote financial sector development while ensuring that increased liquidity translates into productive investments in the health sector. The study further suggested the need to redirect credit toward productive sectors, particularly healthcare, through targeted lending schemes and concessional financing for healthcare providers and health-related enterprises. In addition, the government should increase budgetary allocations to the health sector, improve the efficiency and accountability of health expenditure, and strengthen healthcare infrastructure and service delivery. Greater coordination between financial sector reforms and health sector policies is essential to ensure that financial deepening effectively supports healthcare financing and contributes to sustainable improvements in health outcomes - life expectancy in Nigeria.
JEL: E44, I10, I18, E31, O16, O55
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DOI: http://dx.doi.org/10.46827/ejsss.v12i5.2319
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