Financial Sector Development and Health Outcomes in Nigeria
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Date
2023-12
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Lead City University
Abstract
One major problem arising from the relationship of financial sector development and health outcomes in the Nigerian economy is the lack of comprehensive understanding of how specific financial instruments and institutions influence various health indicators like life expectancy and child mortality. Existing studies often focus on aggregate measures, and there is a need for more in-depth investigations that consider the diverse pathways through which financial sector dynamics such as money, bank and stock markets influence specific health outcomes.This study investigates the effects of money market instruments (monetary policy rate, 12-month deposit rate and treasury bill rate), bank sector (liquidity ratio, loan to deposit ratio and domestic credit), and stock market indices (market capitalization, market stock traded and all share index) on health outcome in Nigeria over the period 1985-2022. Using the ARDL bound testing approach, monetary policy rate and 12-month deposit rate have negative impact on short-run life expectancy in Nigeria. Meanwhile, life expectancy reacted positively to monetary policy rate but negatively affected by treasury bill rate in the long run. Treasury bill rate and 12-month deposit rate positively relate with child mortality rate in the short run.It discovers that liquidity ratio positively influences life expectancy both in the short and long run. The study found that under-5 mortality is positively and significantly influenced by bank sector development measures in the short run. Only liquidity ratio and domestic credit are negatively significant on long-run child mortality.In addition, total stocks transaction value influences life expectancy positively in the short run but negatively in the long run. Also, all share index directly influence life expectancy both in the short and long run. Stock market capitalization negatively influence child mortality both in the short and long run. However, total stock transaction value positively relates to under-5 mortality in the short and long run. All share index has a direct influence on child mortality rate in the short run.There is a need for the policymakers and government agencies to carefully consider the potential health implications when implementing measures that increase interest rates. Also, they should balance the long-term economic goals with the potential health consequences.
Keywords: Money market, banking sector, stock market, life expectancy, child mortality.
Word Count: 288.
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Keywords
Money market, banking sector, stock market, life expectancy, child mortality.