Impact Of Healthcaredelivery On Agricultural Sector Output In Nigeria

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This research work is an empirical effort attempting to examine the impact of healthcare delivery on agricultural sector output using the ordinary least squares (OLS) with annual secondary data from 1980 to 2016 sourced from Central Bank of Nigeria Statistical Bulletin and Index Mundi Database. The co integration and regression analysis of the variables were used to analyze the data.The result of this study shows the independent variables (life expectancy and mortality rate) have significant impact on the agricultural sector output in Nigeria which means that agricultural output is dependent on healthcare. From this study the government are advised to grant free medical care to large scale farmers to sustain their capacity in engaging in the activities of the agricultural sector; they should also set up agencies that will ensure accessibility of good health care.


Title Page                                                                                                             i

Certification Page                                                                                       ii

Approval Page                                                                                                     iii

Dedication                                                                                                            iv

Acknowledgements                                                                                     v

Abstract                                                                                                               vi


    1. Background to the Study                                                                  1
    2. Statement of Problem                                                                       3
    3. Research Questions                                                                           4
    4. Objectives of the Study                                                                     4
    5. Research Hypothesis                                                                                  5
    6. Significant of the Study                                                                    6
    7. Scope of Study                                                                                           6


2.1 Conceptual Literature                                                                           7

2.1.1 Concept of healthcare                                                                        7

2.1.2 The healthcare financing                                                                    7

2.1.3 National health policy (NHP)                                                            8

2.1.4 Health pricing policy                                                                         9

2.1.5 Primary health care (PHC ) scheme                                                   9

2.1.6 life expectancy                                                                                   10

2.1.7 Mortality rate                                                                                    10

2.1.8 Concept of agriculture                                                                       10

2.2  Theoretical Review                                                                              11

2.2.1 Human capital theory                                                                        11

2.2.2  Endogenous growth theory                                                               12

2.2.3 Mellor’s theory of agricultural development                                               12

2.2.4 Structural change theory of  agriculture                                            13

2.3   Empirical literature                                                                                      14

2.4   Gap in literature                                           19


3.1 Research design                                                                                    20

3.2 Theoretical framework                                                                         20

3.3 Model specification                                                                              20

3.4 Method of evaluation                                                                                     21

3.4.1 Economic Criteria Test (A Priori Test)                                                       21

3.5 Statistical Test of Significance(first order test)                                               22

3.5.1 Test of Goodness of Fit                                        22

3.5.2 t-test of significance                                                                                    22

3.5.3  f-test of significance                                                                                   22

3.6  Econometric Test of Significance (Second Order Test)                                 23

3.6.1 Auto correlation test                                                                          23

3.7 Diagnostic test                                                                                      23

3.7.1 Normality test                                                                                   23

3.7.2 Heteroscedascticity Test                                                                    24

3.7.3 Unit root/stationality test                                                         24

3.8 Data Required and Sources                                                                            24


4.1 Unit Root Test                                                                                               25

4.2 Regression Analysis                                                                             25

4. 3 Normality Test                                                                                    27

4. 4Statistical test of significance                                                                27

4.5Autocorrelation Test                                                                                       28

4.6Granger Causality                                                                                  284.7 Test of Hypothesis                                                                                        29

4.8 Implication of Result                                                                                      29                                                    


5.1 Summary of Findings                                                                                     30

5.2 Conclusion                                                                                                     31

5.3 Recommendation                                                                                            31

REFERENCES                                                                                         32

APPENDIX                                                                                                39



1.1 Background of the Study

Better health care is a primary human need. According to the World Health Organization (WHO, 2005), fifty percent of economic development differentials between developed and developing nation is attributable to ill-health and low life expectancy. Provision of health is seen as a key element of a policy to promote broad-based national development. The burden of diseases such as HIV/AIDS is known to slow the human productivity of developing countries. Therefore, every country primarily aims to devote huge public fund to health sector so as to empower its human capital.  Hence, the importance of health as a form of human capital cannot be over emphasized. Good health and productive agriculture are important in the economy of any nation; good health enhances work effectiveness and the productivity of an individual through increase in physical and mental capabilities. Disease significantly reduces the productivity of agricultural labor in developing countries due to the loss of labor and know-how of productive adults (World Bank, 2008).

On the basis of economic analysis, there appears to be an inextricable link between health care and human labor productivity channeled to the agricultural sector. Over the years in Nigeria, there have been some financial commitments by the government in the area of health sector which is believed to also affect human productivity exhumed in the agricultural sector. The financial commitments of government to the health sector are both the recurrent and capital expenditure on health. The capital expenditure of government decrease from N7.3million in 1970 to N4.88 million in 1972 before it rose again to N126.75 in 1974. It sharply dropped to N79.2 million in 1982. From 1982 to 1987, capital expenditure on health declined from N72.9m in 1982 to an all-time low of N17.2m in 1987. This development is occasioned by the fact government was more preoccupied in the business of paying workers’ salaries with less attention being paid to capital expenditure. In 1988 there was a significant rise to N297.96m. By 1991, the statistic dropped to N137.3m but plummeted to N33.72m in 1992. The figure rose steadily from N586.2 million in 1993 to N17,717.42m, N33,396.97m and N34,647.9m  in 2003, 2005 and 2007 respectively the capital expenditure on health stood at N64,922.9m in 2008, N79,321.09m in 2011 and increased to N82.98m in 2015.

The recurrent expenditure on health also follows a similar trend. It rose gradually from N12.48 m in 1970 to N59.47m in 1977  but fell to N40.48m in the successive year. The pattern of health expenditure at this period is a reflection of both the product of the disposition of government policy towards health issue and the determination of the Federal Government to improve the health care system with the wind fall of oil revenue.  From 1984 to 1986, recurrent expenditure rose from N101.55m to N134.12m when the recurrent expenditure as a percentage of total expenditure stood at 77.4 percent. The value of recurrent health expenditure reduced significantly in 1987 to N41.31m before it rose steadily from N422.80 in 1988 to N24,522.27m in 2001. This figure rose again from N40,621.42 in 2002 to N44,551.63, N58,686.56 and N72,290.07 in 2005, 2006 and 2007 respectively. Recurrent expenditure on health stood at N18,200.0 million in 2008 and N21,542.9m in 2011, N179.99m in 2013 and N257.72m in 2015.


On the other hand, the agricultural output in Nigeria in 2011 totaled in monetary value as N14,037.83m, and N15,816.00, N16,816.555m, N18.018.61 and N19,936.97m in 2012 to 2015 respectively. Health problems apart from affecting the state of welfare of affected households, affects agriculture and economic growth negatively through the reduction of available labor hours for economic activities, premature loss of  human resources and high cost of diseases treatment which adds to the economic burden of the rural households. Research focusing on agriculture has revealed the negative impact of ill health especially on the welfare of agricultural household affects overall economic development. Against this background, this study is aimed at carrying out an empirical analysis of the impact of healthcare on agricultural output in Nigeria from 1980-2016.

1.2 Statement of the Problem

 Many programs like the River Basin Development Authorities, Green Revolution Scheme have been initiated by the government in order to cut down the issue of food scarcity but to no avail. Agricultural production decreases as a result of several factors such as disease, climate change which invariably affects human health and thereby deepens poverty in Nigeria. Majority (over 70%) of Nigerians depends on agriculture for their means of livelihood and there has been a case of food insecurity which has led to malnutrition and again affects human health. Poor health as a result of ailment and diseases diminish economic opportunities for a large number of the farming household that form majority in the study area and this in turn affects the poor negatively who are stuck in the vicious cycle of poverty. In spite of huge government spending, coupled with bilateral and multilateral assistance in the health sector, the patterns of health status in Nigeria mirror many other Sub-Saharan African nations but are worse than would be expected given Nigeria’s GDP per capital. Poor human resources and policy management have led to unprecedented brain drain in the health sector as health professionals in search for better conditions of service abroad often vote with their feet in droves.

The Nigerian health system is in comatose; health care financing is worse hit especially in the poor continent where health care faces serious problem. Effects of ill health on farm households include three broad impacts: absenteeism from work due to morbidity (and eventual death); diversion of family b time to caring of the sick; and the loss of savings and assets in the course of dealing with diseases and its consequences. Against these problems listed above this research work tends to be an aid in proffering solutions.


    1. Research Questions

In the course of this study, the following research questions will be addressed:

  1. To what extent has health care affected the level of agricultural sector output in Nigeria?
  2. How has life expectancy influenced agricultural sector output in Nigeria?
  3. What extent has infant mortality affected agricultural sector output in Nigeria?
  4. What direction of causality exists between health care delivery and agricultural sector output in Nigeria?


1.4 Objectives of the Study

The broad objective of this study is to determine the impact of healthcare delivery on agricultural output. In line with this, the specific objectives of the study are:

  1. To evaluate the effect of life expectancy on agricultural sector output in Nigeria.
  2. To analyze the impact of infant mortality on agricultural sector output in Nigeria.
  3. To examine the causal relationship between healthcare delivery and agricultural sector output.

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Impact Of Healthcaredelivery On Agricultural Sector Output In Nigeria