Foreign Inflows, Governance and Health Outcomes in Nigeria

Abstract

Foreign financial inflows to Nigeria have risen in the last two decades. Currently, the country receives over one-third of remittance flows to sub-Saharan Africa and is one of Africa's top recipients of foreign aid with the health sector being a major target. Despite the substantial foreign inflows, health outcomes in Nigeria have not remarkably improved. This raises important questions about the effectiveness of foreign inflows in achieving better health outcomes in Nigeria. This article examines the effects of foreign inflows on health outcomes utilising different components of foreign inflows—aid and remittance. It also investigates the role of governance in the foreign inflows-health outcomes nexus using time series data from Nigeria covering the period 1984–2021. Results from the Autoregressive Distributed Lag (ARDL) model suggest that health aid has a limited impact on health outcomes, while remittance has been ineffective in driving improvements in health outcomes. Other factors, such as growth in real income per person, reduction in the emission of pollutants, such as carbon dioxide and improvements in governance, appear to be critical for improving health outcomes in the country.