Causality Relationship among Healthcare Expenditure, Environmental Pollution, and Economic Growth: Evidence from West Africa (WA) Sub-Region
The effects of economic growth on environment are continuously more evident in Africa countries most especially in West Africa sub-Region. Hence, industrialization keeps on soaring at high-speed inducing carbon-related emissions and having adverse effect on human health, thereby increasing healthcare expenditure as a result of economic activities. Given the above, the crux of the study is to investigate the causal relationship among healthcare expenditure, environmental pollution, and economic growth in West Africa sub-region. The study considered annual time series data spanning from 1980 to 2023 and sourced from World Bank, World Development Indicator 2023 edition database. Panel VAR Granger causality model as estimation technique was employed. Results showed that bi-directional relationship exists between RGDP and CO2 as well as between RGDP and N2O. This implies that environmental pollution indicators increase as growth rate of West Africa sub-region is enhancing and vice-versa. Thus, enhancement of West Africa sub-region growth of economy cannot increase without correspondent increase in environmental pollution indicators. But conversely, a unidirectional relationship exists from HEXP to RGDP without a feedback. This implies that healthcare expenditure is necessary for enhancing growth rate of West Africa region. While other results showed that no causal relationship exists between number of doctors as well as inflation rate and economic growth of West Africa sub-Region. The study concludes that the numbers of doctors available are not enough despite huge expenditure allocated to region’s health sector as well as environmental pollution is highly pronounced in the region. Based on the findings, the study therefore recommends that successful governments in West African region should look inward for measures to reduce environmental pollution challenges affecting health status of the people. They should also jack-up the budgetary allocation to health sector so as to sustain the flows of resources that can improve health outcomes, afterwards economic growth of the region can be better enhanced.
Keywords: Economic growth, Healthcare Expenditure, Environmental Pollution, PVAR-Granger
JEL Classification: Q4, Q, I, C23
