Out-of-Pocket Expenses Dominate Nigeria’s Health Spending at 75%
Nigerian households are bearing the brunt of healthcare costs, with out-of-pocket expenses accounting for nearly 75% of total health expenditures in the country.
This is according to a report on the World Bank’s Nigeria: Primary Healthcare Provision Strengthening Program.
For this program, the Nigerian government is engaging the World Bank for a $500 million loan to support its recently approved Health Sector Renewal Investment Initiative (HSRII).
This report stresses the significant financial burden placed on citizens, who often have to dip into their limited personal funds to cover essential health services.
Nigeria’s government health spending is among the lowest globally
The report reveals that Nigeria’s government spending on health is one of the lowest globally, contributing to the high out-of-pocket expenses faced by households.
With government health expenditure at a mere 0.5% of GDP, the burden falls heavily on individuals, especially those in low-income brackets, exacerbating poverty levels and hindering access to necessary medical care.
The report further details that this heavy reliance on personal funds has made Nigeria the country with the fourth-highest share of household out-of-pocket health expenditures worldwide, posing significant challenges to achieving universal health coverage (UHC).
It read: “The Government’s health spending ranks the lowest in the world when measured as a share of GDP, at 0.5 per cent. This translates to about US$14 per capita, of which less than 20 per cent (US$2.62 per capita) is allocated to primary care.
“Low levels of health financing severely limit the country’s ambitions for universal health coverage (UHC). For example, this allocation is a fraction of global estimates on the cost of providing an essential health service package in countries at Nigeria’s income level, with two recent estimates falling between US$70 and US$80 per capita. It is also far less than the estimated cost of a basic primary care package in Nigeria (about US$14 per capita).
“A major constraint on health spending is the overall low level of Government revenue, about 7 per cent of GDP, further exacerbated by the low prioritization of health within the budget which stands at 4 per cent. The low priority placed on public health spending is particularly evident at the state level, in part due to low rates of budget execution.
“As a result of low Government health spending, household out-of-pocket expenditures account for almost 75 per cent of total health spending in Nigeria, the fourth-highest share in the world.”
The report noted that the poor health outcomes and weak health financing in Nigeria are intrinsically linked to the country’s complex federal arrangements.
What you should know
The World Bank’s Human Capital Public Expenditure and Institutional Review earlier noted that health-related expenses push over one million Nigerians into poverty every year.
According to the report, Nigeria ranks poorly in Universal Health Coverage (UHC) within Africa, with an index score of 44.
Nairametrics earlier reported that the federal government earmarked a total of N1.34 trillion for the health sector in the 2024 fiscal year budget of N28.78 trillion.
However, this allocation represents 4.6% of the total budget, deviating significantly from the 2001 Abuja Declaration’s recommendation that African governments allocate a minimum of 15% of their annual budget to the health sector.
The Medical and Dental Consultants Association of Nigeria (MDCAN) recently criticized the federal government over the current 5% budgetary allocation to the health sector, emphasizing that it falls short of addressing the sector’s myriad challenges.
Nigeria is set to establish the Maternal Mortality Action (MAMA) Fund as part of an ongoing negotiation for a $500 million loan from the World Bank.
The initiative comes as part of the broader $65 million Investment Project Financing (IPF) component of the HOPE Health Program, which seeks to improve access to quality healthcare services across Nigeria.
