Has South Africa’s Investment in Public Health Care Improved Health Outcomes?

Working paper 663
Author(s): 
Mr. Lucas Bidzha, Dr. Talita Greyling and Mr. Jugal Mahabir
Publication date: 
February, 2017
Classification-JEL: 

South Africa’s total expenditure on health equates to almost 9% of its gross domestic product, which is above the average of other countries classified as middle-income countries. Notwithstanding this investment, indicators of health outcomes remain relatively lower when compared to the same countries. The aim of this paper is to investigate the effectiveness of public health expenditure in improving health outcomes in South Africa. Panel estimations techniques were used using data for the country’s nine provinces over the period 2005 to 2014. Results have shown that, on average, an increase in public health expenditure per capita leads to improvement in the under-five mortality rate. With regards to life expectancy at birth, public health expenditure was found to be statistically not significant. Control variables such as real GDP per capita, female literacy rate, immunisation coverage ratio, access to formal housing and HIV/Aids prevalence were also found to be important determinants of health outcomes in the country. The key policy implications of these findings are that government should continue to prioritise greater resource allocation to public health spending, including towards improving access to formal housing, immunisation coverage, women education and increase targeted interventions on HIV/Aids

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