Global Journal of Economic and Finance Research

Access to quality and affordable healthcare remains a significant challenge in the ECOWAS region, where out-of-pocket (OOP) payments continue to dominate healthcare financing. In this context, we provide a thoughtful and empirical investigation into how financial development, in terms of access, depth, and efficiency, contributes to reducing OOP payments for healthcare in ten ECOWAS countries (Benin, Burkina Faso, Côte d'Ivoire, Ghana, Guinea, Liberia, Niger, Nigeria, Sierra Leone, and Togo). Specifically, we employed the pooled mean group (PMG) estimator and exploratory data analysis, and found that the proportion of OOP payments on healthcare expenditure averaged 54.16% between 2000 and 2021, exceeding the WHO benchmark of 15–20% for financial protection. This highlights a significant vulnerability within the healthcare financing system. Moreover, we found that financial access, depth, and efficiency contributed positively to OOP healthcare payments during the study period. This suggests that the development of the financial sector, in terms of improved access, size (relative to GDP), and resource allocation, offered households more opportunities to mobilise funds for their healthcare needs, rather than reducing their financial burdens. Additionally, the results showed that regulatory quality significantly decreased OOP payments for health in both the long and short term. This finding is notable as it underscores the important role of the institutional framework in enhancing how healthcare systems are governed, regulated, and financed to provide financial protection and promote universal health coverage (UHC) for households. Consequently, we recommend that policymakers, including monetary authorities and stakeholders in the health sector, ensure that financial development is strategically aligned with the goal of UHC to reduce the rising OOP costs in the ECOWAS region. 

Financial development, out-of-pocket payments, financial access, financial debt, financial efficiency and ECOWAS

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