Abstract

Health spending significantly boosts long-run economic growth in East Africa, supporting greater investment in health and productive infrastructure. There is contentious evidence on the effect of health expenditure on economic growth across the globe, with no single piece of evidence explaining the impact of health expenditure on economic growth in East Africa. This study finds that health expenditure plays a significant and positive role in promoting long-run economic growth in East Africa. Using panel data from 2000 to 2020 and a Panel ARDL model, the results show that investing in health alongside capital formation, labour force growth, trade openness, money supply, and stable inflation strongly supports economic performance. The study recommends that East African governments increase investment in health infrastructure, improve health worker remuneration, and raise budget allocations to meet the Abuja Declaration target. It also encourages greater investment in productive infrastructure, such as transport, electricity, and ICT, to further stimulate growth.

DOI: doi.org/10.63721/26JESD0126

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