Government Fiscal Health, Family Planning and Poverty Rate in Nigeria

Evidence from VECM

Abstract

Nigeria. Previous studies failed to link health expenditure appropriately to family planning and poverty alleviation in Nigeria. This study addresses this theoretical gap by employing the vector error correction mechanism (VECM) in analysing the interrelationship between government fiscal health, family planning and poverty rate in Nigeria by employing time series data from1977 to 2019. The data were tested for stationarity and found to be statistically significant at 0.05 level of significance. The result of the VECM showed that GDPP, SGHE, POVR and MMORR significantly explain 44.49% variation in family planning, while the ECM coefficient indicates a speed of adjustment of 5.372%; and it is statistically significant. The FEVD of family planning (FP) indicated that the variability of the SGHE was also rising between 0.193528% in the second period to 2.811% in the tenth period. The variability in POVR accounted for 1.008% of the variation in FP in the second period. The variation in poverty rate fell relatively over the forecast horizon such that at the tenth period it was 1.888%. The study concluded that the government’s fiscal health expenditure has a positive but insignificant impact on FP, but a negative impact on POVR and MMORR in Nigeria. It is recommended that the government should increase its fiscal health expenditure significantly. This can be achieved via an increase in the budgetary allocation for the health sector.