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Does health investment matter for productivity growth in sub-Saharan Africa? Empirical insights from income and regional economic grouping perspectives

Author

Listed:
  • Solomon Oluwaseun Okunade

    (Chrisland University
    DePECOS Institutions and Development Research Centre (DIaDeRC))

  • Abiodun Sunday Olayiwola

    (Chrisland University)

  • Kehinde Elizabeth Joseph

    (Kwara State College of Education)

  • Adekunle Toyin Olawunmi

    (Chrisland University)

Abstract

This study investigates whether investment in the health sector matters for achieving sustainable growth via the Dumitrescu–Hurlin heterogeneous panel non-granger causality test and the dynamic panel threshold model for 28 sub-Saharan African countries (SSA). We report evidence of a bi-directional causality between health investment and productivity growth in the panel of SSA and find that investing a substantial part of GDP (about 7.96%) into the health sector is necessary to increase productivity growth in SSA. When we control heterogeneity in our sample using the regional economic grouping, we report unidirectional causality across some panels, and variations in the estimated threshold with higher values for all groups except ECOWAS with 5.82%. Using the World Bank income classification, we also find varying evidence of no causal relationship between health investment and productivity growth across the panels, except in the upper-middle income group. Generally, above the threshold level, health investment has positive effects on productivity growth for all groups. We report other significant findings that are instructive to policymaking and future research and conclude that SSA countries should increase investment in the health sector to ensure greater productivity and should deepen growth-oriented policies to further stimulate investment in the health sector.

Suggested Citation

  • Solomon Oluwaseun Okunade & Abiodun Sunday Olayiwola & Kehinde Elizabeth Joseph & Adekunle Toyin Olawunmi, 2025. "Does health investment matter for productivity growth in sub-Saharan Africa? Empirical insights from income and regional economic grouping perspectives," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 14(1), pages 1-22, December.
    • Handle: RePEc:spr:jecstr:v:14:y:2025:i:1:d:10.1186_s40008-025-00348-3
    DOI: 10.1186/s40008-025-00348-3
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    References listed on IDEAS

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    More about this item

    Keywords

    Health investment; Productivity; TFP; Growth; Sub-Sahara Africa;
    All these keywords.

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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