Interactive Impact of Health Expenditure and Institutional Quality on Life Expectancy in Sub-Saharan Africa.

Abstract

This study examines the interactive impact of health expenditure and institutional quality on life expectancy in 45 Sub-Saharan African countries from 2000 to 2024, using panel data. Health expenditure, institutional quality and life expectancy were sourced from World Bank, (2026). System Generalized Method of Moment (GMM) test was employed to analysed the data. The result revealed that both private and government health expenditure significantly and positively improve life expectancy in Sub-Saharan Africa. Among the institutional quality indicators, regulatory quality exerts a positive and significant impact on life expectancy, while government effectiveness and control of corruption show negative effects, although only control of corruption is statistically significant. The interaction results reveal that government effectiveness enhances the positive impact of government health expenditure on life expectancy. However, weak corruption control and poor regulatory quality reduce the effectiveness of health expenditure, particularly public health expenditure, in improving health outcomes. The year effects further indicate that life expectancy generally declined between 2001 and 2022, with the largest decline occurring in 2021 due to the COVID-19 pandemic, while improvements were observed in 2023 and 2024, suggesting post-pandemic recovery in the region. It is recommended that governments in Sub-Saharan Africa should increase both public and private health expenditure, particularly public health financing, to improve life expectancy. Policymakers should also strengthen regulatory quality through improved healthcare regulations, monitoring systems, enforcement mechanisms, and service standards to ensure efficient and accountable healthcare delivery. In addition, governments should implement institutional reforms aimed at enhancing governance effectiveness, reducing bureaucratic inefficiencies, and strengthening public sector management to maximize the impact of health expenditure on health outcomes. Furthermore, strong anti-corruption measures, transparency in health budgeting, and effective monitoring of public health funds should be prioritized to minimize leakages and inefficiencies that weaken the effectiveness of government health spending.