Moderating Effect of GDP Growth Rate on Public Health Care Financing and Tax Revenues, among the East Africa Community Members Countries?
DOI:
https://doi.org/10.47604/ijfa.3502Keywords:
GDP Growth Rate, Public Healthcare Financing, Tax Revenues, East Africa Member CountriesAbstract
Purpose: This research aimed at establishing the linkage between public healthcare financing and tax revenues and the moderating effect of GDP growth rate within the context of East Africa Community Countries.
Methodology: The target population was three EAC member countries comprised of Kenya Uganda and Tanzania. Causal and cross-sectional research design were applied. For hypothesis tests, stepwise multiple regression was used to test for moderation effect of GDP growth rate on public healthcare financing and tax revenues. The secondary data was sourced from the research departments of the National Treasury; State Departments of Planning / National Bureau of Statistics; the Revenue Authorities; and the Central Banks of the three countries using a set of data matrix for the period 1982 to 2022. Specifically, tax revenues were proxied by the sum of revenues realized. Public health financing was proxied by the total sum of expenditure towards health. And the GDP rate was indicated by the prevailing GDP rate over the period of study.
Findings: Findings reveal a statistically significant link between PHF and Tax revenues for East Africa member Countries; Although the R-square increased by 2.5%, when GDP rate was introduced into the model, it resulted that no significant moderating effect in the linkage between PHF and tax revenues in EAC. The PHF and Tax revenues relationship that was previously significant also became weaker and negative, hence no moderation.
Unique Contribution to Theory, Practice and Policy: The study extends on predictive insights of ability to pay theory in conceptualization, informing and understanding the linkage of PHF and tax revenues. The study adds to knowledge in PHF, GDP growth rate, and tax revenues by showing that the linkage of PHF and Tax revenues among East Africa member Countries is not direct but rather is moderated by GDP growth rate. Health, budgetary and finance sectors and other agencies in the government can be guided by the findings to inform policies that can address GDP growth rate, guide the healthcare allocations particularly when setting goals to expand tax revenues.
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Copyright (c) 2025 Martin Riungu, Prof. Winnie Nyamute (PhD), Dr. Duncan Elly Ochieng’ (FFA, CPA, CIFA), Dr. Laura Barasa (PhD)
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