Case Study

Examining Budget Credibility in Nigeria’s Health Sector

Nigeria’s health expenditure as a share of gross domestic product​ has remained below four percent over the past five years. The country’s healthcare services have been consistently poor, with a growing population and emerging health inequalities exacerbating the situation. The sector is characterized by lack of adequate health infrastructure, obsolete facilities​,​ and insufficient funding to equip and staff hospitals. Prioritizing an equitable and inclusive healthcare system is crucial for governments at all levels, including the national and the sub-national levels, as adequate and appropriate financing of healthcare is imperative for the future of every nation. The share of total federal expenditure for the Federal Ministry of Health, the administrative body responsible for providing quality and efficient health care services for Nigerians, has been hovering between four and five percent for the last f​our​​ years​. Despite the increase of federal health budget allocations from 434 billion naira in 2018 to 1.02 trillion naira in 2021, the ministry underspent their approved budget by 31 percent in 2018 and 47 percent in 2021. This underspending limits the funding available for the nation’s health system and therefore restricts opportunities for equitable, qualitative and universally accessible healthcare.

​​The underperformance of Nigeria’s health sector can be attributed to insufficient budget allocation and utilization, dilapidated health infrastructure, and ​the attrition rate of the country’s health workforce​. The Nigeria Demographic and Health Survey of 2018 indicates that only 35 percent of births take place in a health facility and 56 percent of mothers do not receive any postnatal care within six weeks of childbirth. Key health indicators from the United Nations Inter-agency Group for Child Mortality Estimation also show no significant improvement for a country that hopes to achieve universal health coverage by 2030. The non-prioritization and underspending of the health budget has significantly contributed to poor health outcomes, including an infant mortality rate of 71 out of 1,000 live births. The same number of live births also has an under five mortality rates of 110, maternal mortality rate of 79, and neonatal mortality rate of 35. According to the Nigeria Medical Association, the doctor-to-patient ratio in Nigeria stands at approximately one doctor for every 4,000 – 5,000 patients. This ratio significantly falls short of the World Health Organization’s recommended ratio of one doctor for every 600 patients. ​​ Private health expenditure (primarily out-of-pocket) accounts for approximately 69 percent of total health expenditure. This is a staggering amount in a country where 133 million people (approximately 63 percent of the population) are multidimensionally poor.

The overall objective of this brief is to shed light on the causes of observed underspending in Nigeria’s health sector budget between 2018 and 2021 and how these spending deviations have impacted the country’s quest to achieve the Sustainable Development Goals. The brief seeks to understand whether allocated funds for healthcare services are released and spent as planned and utilized judiciously as approved by the legislature in the appropriation acts. Data on budget allocations and execution of the federal budget from ​2018 to 2021 are sourced from the website of the Budget Office of the Federation and the Open Treasury Portal. Key informant interviews (KIIs) were conducted with key actors at the federal level and at the sub-national level, in Ogun State. Participants in the KIIs included key government officials at the Federal Ministry of Health and the National and State Primary Health Care Development Agency as well as​​ officials from the Federal and Ogun State Ministry of Finance.

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Authors

Olaniyi Olaleye

Program Officer, Nigeria, International Budget Parnership

Olaniyi Olaleye joined the International Budget Partnership in 2021 as a Program Officer, Budget Credibility in Nigeria.  Previously, he was a Senior Research Analyst at  BudgIT Foundation. Olaniyi earned a Bachelor of Arts Degree in History and International Relations from the Obafemi Awolowo University. Ile-Ife and holds a master’s degree in International Law and Diplomacy from the University of Lagos, Nigeria.

Olaniyi has written and co-published technical papers on budgeting, fiscal realism, sub-national transparency and inequality. His interest includes unearthing underlying public finance management issues in the social sectors. Olaniyi has managed core governance programs supporting National and International Development Partners and has led a series of campaigns to improve fiscal transparency and accountability at the National and Sub-national levels in Nigeria.

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