The effects of health expenditure on infant mortality in sub-Saharan Africa: evidence from panel data analysis

Although health expenditure in sub-Saharan African countries is the lowest compared with other regions in the world, most African countries have improved their budget allocations to health care over the past 15 years. The majority of health care sources in sub-Saharan Africa are private and largely involve out-of-pocket expenditure, which may prevent healthcare access. Access to healthcare is a known predictor of infant mortality. Therefore the objective of this study is to determine the impact of health care expenditure on infant mortality in sub-Saharan Africa.

The study used panel data from World Bank Development Indictors (WDI) from 2000 to 2015 covering 46 countries in sub-Saharan Africa. The random effects model was selected over the fixed effects model based on the Hausman test to assess the effect of health care expenditure on infant and neonatal mortality.

Both public and external health care spending showed a significant negative association with infant and neonatal mortality. However, private health expenditure was not significantly associated with either infant or neonatal mortality. In this study, private expenditure includes funds from households, corporations and non-profit organizations. Public expenditure include domestic revenue as internal transfers and grants, transfers, subsidies to voluntary health insurance beneficiaries, non-profit institutions serving households or enterprise financing schemes as well as compulsory prepayment and social health insurance contributions. External health expenditure is composed of direct foreign transfers and foreign transfers distributed by government encompassing all financial inflows into the national health system from outside the country.

Health care expenditure remains a crucial component of reducing infant and neonatal mortality in sub-Saharan African countries. In the region, where health infrastructure is largely underdeveloped, increasing health expenditure will contribute to progress towards reducing infant and neonatal mortality during the Sustainable Development Goals (SDGs) era. Therefore, governments in the region need to increase amounts allocated to health care service delivery in order to reduce infant mortality.