This study examines the effect of recurrent and capital government health expenditure on health service delivery in Nigeria over the period 1990 to 2025. Despite successive policy reforms and incremental increases in nominal health budget allocations, Nigeria continues to record persistently poor health outcomes including a life expectancy of approximately 54.6 years, one of the world's highest maternal mortality ratios, and chronic shortfalls against the African Union Abuja Declaration's 15 percent health budget benchmark. A central but underexplored dimension of this challenge is the structural composition of public health spending, characterised by the overwhelming dominance of recurrent expenditure (averaging 45.2% of total government health spending) over capital investment (averaging only 3.54%).
Anchored in the Grossman health capital demand model and human capital theory, the study employs the Autoregressive Distributed Lag (ARDL) Bounds Testing approach within an Error Correction Model (ECM) framework using annual time series data sourced from the World Bank World Development Indicators and the Central Bank of Nigeria Statistical Bulletin. Health service delivery is proxied by life expectancy at birth, with recurrent health expenditure (RHE) and capital health expenditure (CHE) as primary explanatory variables, supplemented by real GDP per capita, inflation rate, and urban population share as controls.
Pre-estimation Augmented Dickey-Fuller (ADF) unit root tests confirmed a mix of I(0) and I(1) series with no I(2) variables satisfying the ARDL precondition. The ARDL Bounds Test yielded an F-statistic of 5.7182 (p = 0.00144), exceeding the 1% upper critical bound and confirming a robust long-run cointegrating relationship among the study variables. Long-run estimation results show that both recurrent health expenditure (β = 0.1245, p < 0.05) and capital health expenditure (β = 0.1876, p < 0.01) exert positive and statistically significant effects on health service delivery. Crucially, capital expenditure generates a larger long-run return approximately 51% higher than the recurrent expenditure elasticity directly challenging Nigeria's recurrent-dominated budget structure.
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- Peter Ellah (Autor), 2026, Effect of Recurrent and Capital Health Expenditure, Múnich, GRIN Verlag, https://www.grin.com/document/1736241