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This study examines the relationship between government expenditure on health and economic growth in Botswana. It seeks to test the existence of cointegration and specification of the deterministic components with special reference to the Pantula Principle. This helps to overcome the shortfall of the method by Johansen, which may lead to spurious results by omitting the presence of deterministic components in the analysis. The cointegration approach is used and tested using three methods by Engle and Granger (1987) or EG, a procedure suggested by Johansen (1988) and error correction model (ECM) approach proposed by Granger(1988) and short-run analysis is made using the pairwise granger causality tests. Findings show that the correct model specification for testing long-run relationships consists of one cointegrating vector with a constant which is the most restrictive hypothesis according to the Pantula principle. Using the Johansen approach, total health expenditure and recurring health expenditure have a cointegration relationship with growth while development health expenditure and growth are not cointegrated. The ECM and the approach by EG confirm a weak and/or no cointegration between the variables. Growth has no effect on government expenditure on health in the short run, but a cointegration relationship suggests that it may marginally contribute to an increase in health expenditure over the long term. The study clarifies the correct model to test for cointegration and specification for the deterministic component. It confirms the existence of a healthcare expenditure-led growth hypothesis. This requires Botswana to design a policy that targets specific parts of recurrent and development health expenditure to support human capital development and influence future growth.

This paper explores the inter-connectedness of remittances and financial development and how their associated covariates such as savings, investment, money supply and economic growth are impacted by this relationship. The study employs a panel vector autoregression (P-VAR) estimation technique, and the generalized methods of moments (GMM) are applied after removing fixed effects and lagged regressors are used as instruments to have consistent estimators. The main findings of the study demonstrate that (i) remittances and financial development have a feedback interrelationship, and some interlinkages are identified amongst their covariates, (ii) economic growth has a dual connection with financial development and that (iii) savings, investment, and broad money supply influence both financial development and remittances. These findings contribute to current discussions in the literature as they support the importance of deepening financial markets in SSA, and attracting more remittances. The significant role played by the diaspora in improving domestic financial depth is confirmed. Progression in SSA economic growth helps to stimulate those in the diaspora to repatriate most of their earnings back home.