THE INTERCONNECTEDNESS BETWEEN HEALTH AND FINANCIAL DEVELOPMENT: EVIDENCE FROM LOW-INCOME AFRICAN COUNTRIES

Abstract

Human capital, particularly health and education, is crucial for the development of countries. This
study investigates the causality relationship between financial development and health variables in lowincome
African countries. Using data from 11 African countries between 2001 and 2017, the study found a
bidirectional causal relationship between financial development and health variables. Financial development
leads to expanded employment opportunities and decreased wage gaps, as well as the possibility for the
government to invest more in health expenditures for the poor. The study argues that investments in healthcare
are not expenses but are, in fact, investments that contribute to long-term economic growth by increasing the
health of the population. The study concludes that investments in human capital, including health, are crucial
for economic development of low-income African countries.