Funding Universal Healthcare Delivery In Nigeria

Abstract

Health is universally recognized as a fundamental human right, and its realization depends on the principles of availability, accessibility, affordability, and quality of care. Achieving these principles requires the implementation of universal healthcare delivery (UHC), which ensures that all individuals, regardless of socio-economic or political status, have access to essential health services without experiencing financial hardship. Universal healthcare rests on three critical pillars: population coverage, service coverage, and financial protection. In alignment with the United Nations Sustainable Development Goal Three (SDG 3), countries are expected to guarantee equitable healthcare access for all citizens. In Africa, efforts to strengthen healthcare systems were reinforced through the Abuja Declaration of 2001, in which member states committed to allocating at least 15 percent of their national budgets to the health sector. However, Nigeria has consistently fallen short of this target. Despite various initiatives by federal, state, and local governments to improve healthcare access, sustainable funding remains a major challenge. Declining government revenues, competing developmental priorities, and inefficient financial management have significantly constrained the attainment of universal healthcare delivery in Nigeria. Consequently, national health policies and strategic targets have only been marginally achieved. The National Health Financing Policy and Strategy (2017) outlined ambitious goals, including increasing government health expenditure, expanding health insurance coverage, and reducing out-of-pocket spending. However, these targets remain largely unmet due to insufficient funding and weak implementation mechanisms. Public spending on health has remained between 3 and 6 percent of the national budget over the past 15 years, far below the Abuja benchmark. This underfunding has resulted in a high out-of-pocket expenditure rate, exceeding 77 percent, thereby exposing many Nigerians to financial hardship and deepening poverty levels. The consequences of inadequate funding are evident in poor health outcomes across the country. Nigeria continues to record high mortality rates, including neonatal, infant, and under-five mortality, as well as maternal mortality, with approximately 58,000 women dying annually from pregnancy-related causes. These outcomes disproportionately affect the poor and rural populations, highlighting the inequities within the healthcare system. In response to these challenges, a comprehensive study was undertaken to evaluate the funding of universal healthcare delivery in Nigeria. The study employed a combination of field observations, stakeholder engagements, key informant interviews, and comparative analyses of healthcare systems in selected countries across Africa, Asia, Europe, and the Middle East. The aim was to assess existing funding mechanisms, identify challenges, and propose sustainable policy options and strategies.The study identified several policy-related challenges hindering effective healthcare funding. These include inadequate stakeholder engagement in policy formulation, policy inconsistency, weak enforcement of standards, and ineffective coordination among institutions, governance inefficiencies, and corruption. Policies are often developed using a top-down approach, excluding key stakeholders such as local governments and communities. This limits policy acceptance and effectiveness. Additionally, weak regulatory enforcement leads to poor service quality, increased healthcare costs, and medical tourism, which drains significant financial resources from the country. Coordination failures among different levels of government and agencies further exacerbate inefficiencies. For instance, many states have not accessed the Basic Health Care Provision Fund due to non-compliance with required conditions, leaving millions without financial protection. Similarly, fragmented procurement systems increase the cost of drugs and medical equipment. Corruption and governance issues, particularly within health insurance administration, also undermine transparency and accountability, while weak monitoring and evaluation systems hinder performance tracking and policy implementation. Legal and institutional challenges also play a significant role. The absence of clear constitutional responsibilities for healthcare across federal, state, and local governments leads to overlaps, duplication, and inefficiency. Furthermore, the non-mandatory nature of health insurance limits coverage, with less than 5 percent of Nigerians enrolled in the National Health Insurance Scheme (NHIS). Delays in implementing key health legislation, such as the National Health Act (2014), further constrain progress. Institutionally, the healthcare system is characterized by low budgetary allocation, high disease burden, inadequate infrastructure, poor data systems, and insufficient human resources. Nigeria bears a disproportionately high share of the global disease burden, including malaria, HIV/AIDS, and rising non-communicable diseases, which increase healthcare costs. Infrastructure deficits are severe, with many primary healthcare centers in poor condition or non-functional. This results in over-reliance on secondary and tertiary facilities, increasing pressure on higher-level institutions. Data limitations also hinder effective planning and resource allocation, as health information systems remain underdeveloped and fragmented. Human resource challenges are equally critical, with inadequate numbers of healthcare professionals and uneven distribution between urban and rural areas. Poor working conditions and limited incentives contribute to workforce shortages and migration, further weakening service delivery. To address these challenges, the study examined various funding models and proposed a hybrid approach tailored to Nigeria’s socio-economic context. Key policy options include increased public funding, earmarked revenue streams, expanded health insurance schemes, and enhanced private sector participation through public-private partnerships (PPPs). Public funding would improve access and equity but is vulnerable to economic fluctuations. Earmarked funding mechanisms, such as dedicated taxes, can provide more stable resources but require effective management systems. Health insurance and risk-pooling mechanisms offer significant potential to reduce out-of-pocket expenditure and improve financial protection. However, achieving universal coverage requires making health insurance mandatory and expanding participation, particularly among informal sector workers. Private sector involvement and PPPs can also enhance efficiency, expand infrastructure, and improve service quality, although regulatory oversight is necessary to prevent cost escalation. The study concludes that Nigeria’s current hybrid financing model combining public funding and insurance remains appropriate but requires strengthening and better coordination. Key findings highlight persistent issues such as low funding levels, fragmented financing systems, weak legal frameworks, poor data management, and inadequate infrastructure. Additionally, high out-of-pocket expenditure continues to push many households into poverty, while limited insurance coverage and stakeholder resistance hinder progress. The study also identifies untapped funding opportunities, including unclaimed dividends, private sector contributions, and improved tax mechanisms. It emphasizes the need for better coordination of donor and stakeholder contributions, as well as increased investment in preventive healthcare to reduce long-term costs. In conclusion, while Nigeria has made some progress toward universal healthcare delivery, significant gaps remain. Achieving UHC will require sustained political commitment, increased funding, institutional reforms, and effective policy implementation. Strengthening governance, improving resource allocation, expanding insurance coverage, and fostering collaboration across all levels of government and stakeholders are essential steps toward ensuring equitable and sustainable healthcare delivery in Nigeria.