Education Expenditure, Health Expenditure and Human Development in West Africa.

Abstract

Human development remains uneven across West Africa despite sustained public investment in health and education. This study examines the separate and joint effects of public health and education expenditure, measured as shares of gross domestic product, on human development in West African countries using country-level panel data for the 16 West African nations from 2000 to 2023. The World Bank databank and UNDP Human Development Reports were the sources of the data. The results of the Pooled OLS showed severe autocorrelation (DW=0.185) and was rejected by Breusch-Pagan LM test (BP=1060.65, p=0.000). Hausman test (Chi²=22.47, p=0.0002) favoured Fixed Effects. The FEM with weighted statistics results (R²=0.728, Adj R²=0.715, F=53.91, p=0.000) showed that a 1% increase in education expenditure increases HDI by 0.0102 (p<0.05), a 1% increase in health expenditure increases HDI by 0.0051 (p<0.05), population growth reduces HDI by 0.0127 (p<0.05), while inflation effect becomes significant after controlling for heterogeneity. With the exception of Togo and Cote d'Ivoire, other West-African countries had substantial cross-section fixed effects. There were statistically significant time effects between 2006 and 2023. For human development in West Africa, the study concludes that spending on education is larger than spending on health. HDI is significantly hampered by population pressure. West African nations must undertake population control measures, boost health spending efficiency through public financial management reforms, and raise education spending to at least 5% of GDP to achieve meaningful human development in the region.

JEL Classifications: O15, H51, H52, Q56