South Africa’s total expenditure on health equates to almost 9% of
its gross domestic product, which is above the average of other countries
classified as middle-income countries. Notwithstanding this investment,
indicators of health outcomes remain relatively lower when compared to
the same countries. The aim of this paper is to investigate the effectiveness
of public health expenditure in improving health outcomes in
South Africa. Panel estimations techniques were used using data for the
country’s nine provinces over the period 2005 to 2014. Results have shown
that, on average, an increase in public health expenditure per capita leads
to improvement in the under-five mortality rate. With regards to life expectancy
at birth, public health expenditure was found to be statistically
not significant. Control variables such as real GDP per capita, female
literacy rate, immunisation coverage ratio, access to formal housing and
HIV/Aids prevalence were also found to be important determinants of
health outcomes in the country. The key policy implications of these findings
are that government should continue to prioritise greater resource
allocation to public health spending, including towards improving access
to formal housing, immunisation coverage, women education and increase
targeted interventions on HIV/Aids.