Impact of Federal Government's Healthcare Expenditure on Economic Growth of Nigeria

The study examined the impact of Federal Governments Healthcare expenditure on economic growth of Nigeria using time series annual data for thirty three years (1981-2013) sourced from the Central Bank of Nigeria Annual Reports. The ordinary least square method (OLS) of data analysis was employed and the data properties were tested for unit root using Augmented Dickey Fuller. The result shows that there is a positive relationship between government total expenditure on health and economic growth. Also, there is a positive relationship between recurrent expenditure and capital expenditure on economic growth with both being significant at 1% levels of probability. Causality test shows a uni-directional relationship from GDP to recurrent expenditure and total expenditure; the Chow test shows a significant difference in budgetary allocation with particular reference to the year under review. It is therefore recommended that the government should keep investing in the health sector to avoid capital flight.