Healthcare in Nigeria is funded throughBudgetary allocation, external sources like international organizations, internally generated revenue like tertiary institutions, National Health Insurance Scheme and out of pocket payments. Despite these multiple sources of funding, Nigeria experiences a terrible and terrifying healthcare system forcing individuals to personally pay for treatment.
Nigeria being the most populous country in Africa, with over two hundred and thirty million people ( 230 million), has its healthcare system divided into three; primary health care, the secondary health care and the tertiary health care.
Primary health care (PHC) is operated by the local government and it is the first level of healthcare system established with the purpose of dispensing basic and preventive health care services to communities. There are over 30,000 PHCs in Nigeria distributed across 36 states with 80% are non-functional. The PHCs are further divided into primary health centers, health clinics and health posts depending on the population it serves.
According to the data insights for Sustainable Energy for All (SEforALL), Nigeria federal government has a total of 1, 226 secondary healthcare centers across its state. This includes the general hospitals, and specialist hospitals ( e.g; mother and child hospitals). At the secondary level, the hospitals which are focused on emergency care, surgeries, and diagnostics are managed by the state government. However, tertiary healthcare is minimal with a total number of about 100 teaching hospitals and 25 federal medical centers (FMCs) across the country. This unit is fixed with different specialists for expert referrals. Unfortunately, these numerous public healthcare centers are labeled with poor delivery due to insufficient funding.
Challenges of Healthcare Funding
Though there are various challenges that hinder the growth of the healthcare system in Nigeria, inadequate funding tops the list. In the 1960s through 1980s, Nigerians enjoyed a free healthcare system which was majorly funded by the government through the national generated revenue, and it was supported by external aids. Unfortunately, this changed in the mid 1980s and till today, Nigerians experience poor health care delivery.
A check on the percentage of the budgetary allocation to the health sector since 2001 when Nigeria declared to allocate 15% of its total budget to education showed that the country is yet to meet this target after 2 decades. This led to the country failing to meet the Universal Health Coverage (UHC) vision which ensures every individual and community has access to quality healthcare service without any financial hardship.
The difficulty of meeting the UHC has been noticed over time; this birthed the launching of the National Health Insurance Scheme (NHIS) in 2005 with a mandate to ensure Nigerians are insured and can access medical care in any case of emergency. However, the mandate was not met and the National Health Insurance Authority (NHIA) Act in 2022 was signed. Unfortunately, 19.2 million of the over 230 million people, which is 8.3% citizens, have been insured.
Furthermore, the Basic Health Care Provision Fund (BHCPF) was established under the National Health Act (2014) to improve health funding and ensure the UHC in the country is met, particularly for vulnerable communities. BHCPF is funded by 1% consolidated revenue fund (government treasury account), World Bank, and Bill & Melinda Gates Foundation. The fund is implemented by the National Primary Health Care Development Agency (NPHCDA), National Emergency Medical Treatment (NEMT) and NHIA to provide drugs, support PHCs, fund health workers, and also subsidize healthcare services for the poor.
A critical look at 2024 release of funds showed that the total amount of consolidated revenue is N18.32 trillion and 1% of this gives N 183.2 billion which should go to the BHCPF, however, a total of N37.9 billion was disbursed in March and June respectively. Obviously, not up to half of the 1% was given out as promised. Additionally, only 15.06% capital allocation was released for the health sector in 2024 due to the bottom cash-up policy which affects infrastructures, medical equipment, and research. This shortfall worsens the financial burden on citizens.
Another cankerworm eating up the health sector is corruption. In 2019, the Executive Secretary of the NHIS was suspended indefinitely over fraud allegations and later arrested by the Economic and Financial Crimes Commission (EFCC) on 25th of January and arraigned before the Federal High Court in Kuje on February 3, 2025 for embezzling over N90 Million. Mismanagement of funds not only diverts resources but causes distrust in the system.
Furthermore, reliance on external funding is also one of the challenges of funding in the Health sector, aside that the donors may have priorities, there is no long term guarantee. Lack of long term domestic investments may also arise when the government reduces the financial commitment to the health sector assuming the donors will fill in the gaps.
Opportunities for Improvement
To beat these issues, the Nigerian government should at least increase the allocation on Health to 10% of the total budget every year, as the current 4 – 6% is inadequate. The government should also endeavor to fully disburse the 1% treasury income to BHCPF to strengthen healthcare and reduce out of pocket payments.
There are existing policies that if put to place, can set things in line. One of these policies that needs to be looked into and revived for the betterment of the health sector is the National policy on public-private partnerships (PPP). The success of PPP has been recorded in Garki Hospital in Abuja which is worthy of emulation. The Ministry of Health, together with the Infrastructure Concession Regulatory Commission (ICRC), should work together to develop a clear health-sector PPP policy which should provide clarity on risk allocation, profit-sharing and contract enforcement to attract private investors.
Furthermore, the government needs to improve on accountability and transparency such that every citizen can track budget allocation, release and execution of projects. This will build public trust and encourage donors to release funds that meet the nation’s priorities.
Another opportunity for improvement is to generate additional revenue on goods that are dangerous to health like tobacco, sugar drinks and alcohol by increasing taxes on them and redirecting the funds to the health sector. Aside from the fact that it is a means of generating revenue, it will also discourage excessive intake.
As for a way to strengthen the health insurance scheme, NHIS should expand the coverage to informal sector workers.
Lastly, while external funding is valuable, it should complement, not replace domestic investments. The government should develop long term financing strategies that can sustain healthcare with or without external donors.
Lawal Sofiyyat Bolanle
Lawal Sofiyyat Bolanle is a freelance journalist with interest in education and healthcare sectors' policies.