THE RELATIVE IMPACT OF GOVERNMENT EXPENDITURE

ABSTRACT

The study examines the relative impact of government expenditure and remittance on Child Health in Nigeria and employs time series data for the period 1981 to 2019. Considering the fact that most time series data is known not to be stationary, unit root tests were performed on time series for each variable in order to avoid getting spurious results. Augment Dickey Fuller (ADF) and Phillips-Perron Tests were used in the unit root tests and some variable were found to be stationary at level while others were found to be stationary at first difference. The Autoregressive Distributed Lag (ARDL) method and the Bounds Test were used to test for short run and long run relationships respectively, the result of which was that both relationships existed. Having found that long run relationship existed among the variables, estimation continued using the ARDL results.
Results of the estimation showed that both government expenditure and remittance have a positive impact on child health. Child Mortality being used as proxy for child health, it was found that 1% increase in remittance would lead to a 1.6% increase in Child mortality while for government expenditure, a 1% increase in expenditure would lead to a 35.3% increase in Child mortality. This showed that relatively, government expenditure has a higher impact on Child health than remittance. Other variables used in the model are gross fixed capital formation and GDP per capita. The results of the study called for some policy considerations especially in terms of government expenditure and remittance whereby they show the need of policies that are directed at increasing both. In line with the Abuja declaration of 2001 the Nigerian government needs to increase its budgetary allocation towards health to reach the proposed 15%. That way if the resources are managed efficiently child mortality is expected to drop and so the Sustainable Development Goal of reducing Under-5 mortality rate to 25 per 1,000 live births by 2030 will be nearly getting achieved.