Financial inclusion and healthcare in Africa: Examining the moderating role of education

• Published date: 01 February 2024
• Author: Muhamadu Awal Kindzeka Wirajing,Ali Haruna,Tii N. Nchofoung
• Date: 01 February 2024
• DOI: http://doi.org/10.1111/rode.13043

REGULAR ARTICLE

Financial inclusion and healthcare in Africa:

Examining the moderating role of education

Muhamadu Awal Kindzeka Wirajing

1

|Ali Haruna

2

|

Tii N. Nchofoung

3,4,5

1

Department of Economic Policy

Analysis, University of Dschang,

Dschang, Cameroon

2

Department of Economic policy

Analysis, University of Dschang,

Dschang, Cameroon

3

Research Laboratory in Fundamental

and Applied Economics (LAREFA),

University of Dschang, Dschang,

Cameroon

4

Groupe de Recherche en Economie

Appliquée et Développement (GREAD),

Dschang, Cameroon

5

Ministry of Trade, Yaounde, Cameroon

Correspondence

Muhamadu Awal Kindzeka Wirajing,

Department of Economic Policy Analysis,

University of Dschang, Dschang,

Cameroon.

Email: wirajingmuhamadu@gmail.com

Abstract

The 2023 Sustainable Development Goal Report reveals

that Africa is still strugglinginitspursuittoachieve

universal healthcare coverage. However, financial risk

protection and human capital development could come

to the rescue by facilitating the attainment of quality

healthcare services. This study examines the effect of

financial inclusion on healthcare in Africa, spanning

from 2000 to 2021. Healthcare is proxied by life expec-

tancy at birth, the immunisation rate, and the lifetime

risk of maternal death. Financial inclusion is approached

through access and usage of financial services. After con-

trolling for the problem of potential endogeneity through

the system generalised method of moment (GMM),

the findings reveal that financial inclusion enhances

healthcare in Africa, signifying that financially included

individuals have a higher conditional probability of

spending more on improving their health relative to the

financially excluded individuals. Moreover, the findings

indicate that education and technology diffusion are

imperative in the quest for enhancing healthcare in

Africa. In addition, after testing for sensitivity analysis by

adopting different indicators of healthcare, the results

remain consistent throughout the study, confirming the

role of financial inclusion in enhancing healthcare in

Africa. After computing the marginal effects, the findings

depict that education and financial inclusion interact to

produce positive synergy effects, signifying that the

Received: 1 March 2023Revised: 31 July 2023Accepted: 1 August 2023

DOI: 10.1111/rode.13043

Rev Dev Econ. 2024;28:97–127. wileyonlinelibrary.com/journal/rode © 2023 John Wiley & Sons Ltd.97

positive role of financial inclusion and education in

enhancing healthcare outweighs the negative condi-

tional effect. The results recommend policymakers

establish a framework that promotes financial literacy

for the enhancement of healthcare in Africa.

KEYWORDS

Africa, education, financial inclusion, GMM, healthcare

1|INTRODUCTION

The importance of healthcare coverage as a goal for securing affordable healthcare services is

documented in the United Nations' Sustainable Development Goal 3 (SDG 3) aimed at ensuring

healthy lives and promoting well-being for all, at all ages. The realisation of this overall health

objective can be achieved through universal health coverage and access to affordable, quality

healthcare services. In addition, the SDG3 places health coverage at the top of its agenda, with

its effectiveness depending on the progress of other SDGs such as prioritising the healthcare

needs of the poor (SDG1), zero hunger (SDG2) and supporting high-quality education for all to

improve health performance (SDG4) (Asma et al. (2020). These SDGs are funded by the finan-

cial sector, described in financial development literature as the engine of all sectors of the econ-

omy (Ambarkhane et al., 2016). Moreover, financial inclusion has provided means through

which poor people can afford the services they need to sustain their livelihood, which is a pre-

requisite to maintaining a healthy life. The rate of financial inclusion in Africa has increased

considerably over the years due to the increasing number of bank branches and mobile money

penetration, which has provided many individuals living below the poverty line with financial

services that help to maintain their nutritional levels and healthcare (C

amara & Tuesta, 2014;

Kanungo & Gupta, 2021; Malladi et al., 2021). With financial inclusion, African countries can

implement user fee reductions and exemptions to lower the overall burden of direct payments

for health services and to reduce inequality in health status and inequality of opportunity in

accessing financial services for healthcare maintenance.

Specifically, SDG 3.8 acknowledges the importance of financial risk protection in its univer-

sal health coverage actions aimed at accessing quality essential healthcare services and access

to safe, effective, quality, and affordable essential medicines and vaccines for all. However, the

SDGs have well established the relationship between financial inclusion and healthcare without

even digging deep into the literature (Al-Hanawi et al., 2020; Malladi et al., 2021). Financial

hardship and income inequality, which are aggravated by illiteracy and financial exclusion

among the poverty-hit population, particularly those living in rural areas, slow down efforts to

improve the relationship between financial inclusion and health in Africa (Gyasi et al., 2019).

Lack of financial resources in most African countries has slowed down or caused the inexis-

tence of universal health coverage, attributed to the fact that finance is required as a push factor

for accessing healthcare services. Similarly, these difficulties in improving health performance

in developing countries are also due to an increase in the prevalence of non-communicable dis-

eases, such as diabetes, obesity, cancer, asthma, hypertension, and hypercholesterolemia (Gyasi

et al., 2019; Jakaria et al., 2022; Nihinlola, 2020). To address this concern, it is incumbent on

policymakers to try and invest in the domains through which all the diseases are reported to

98 WIRAJING ET AL.