The Gap in Funding Nigeria’s Healthcare Infrastructure

  • Posted by: HealthBox Group

The decrepit state of healthcare infrastructure in Nigeria continues to negatively impact economic productivity.

Yesterday, local media reports quoted CBN representatives stating that N26.28bn has been approved for 20 projects under the CBN’s N100bn healthcare intervention fund. Furthermore, the CBN Director for Development Finance was reported to have said the Apex bank is currently evaluating 27 proposals valued at N67bn in the healthcare sector under the intervention scheme. We recall that the CBN as part of its intervention and stimulus measures to shore up the economy from the economic fallout of the global pandemic announced a N100bn intervention support program for healthcare/pharmaceutical research and operations.

The state of healthcare infrastructure in Nigeria remains very poor. To give perspective, in the 2019 & 2020 budget, the FG set 4.2% of the total budget for the healthcare sector of which over 80% was committed to recurrent expenditure. The budgeted amount by the FG in its yearly budgets remain below the 15.0% commitment made at the World Health Organisation’s 2001 Abuja declaration. The meagre spend on healthcare capital expenditure has left public healthcare infrastructure decrepit.

Notably, private institutions have stepped in to bridge the gap by investing in advanced healthcare equipment. However, being too expensive, these healthcare facilities cannot be accessed by the average Nigerian. According to the World Bank, out of pocket healthcare expenditure in Nigeria ranks in the top 5 globally at 77.2% as at 2017 (SSA Average – 35.5%). Thus, with the average Nigerian having to cater for over 70% of his/her healthcare costs, affordability of expensive private healthcare remains very limited.

The decrepit state of healthcare infrastructure in Nigeria continues to negatively impact economic productivity. The most recent Human Development Index ranks Nigeria 158 out of 189 countries with an average life expectancy rate of 54.3 years sticking out prominently. Furthermore, poor local healthcare facilities has led to sustained increase in healthcare tourism with countries like India, United Kingdom and United States of America being prominent destination points. A PWC report estimates that over US$1.0bn was being expended on medical tourism annually. In addition, the poor state of the sector has led to severe brain drain with several healthcare workers seeking greener pastures in countries like Canada, USA and the UK.

In our opinion, bridging the infrastructure deficit in the healthcare sector would require concerted efforts from both the private and public sector. The private sector remains best equipped to provide the quantum of funds needed to revamp healthcare infrastructure in Nigeria. Thus, we believe the FG should enact policies and create incentives that would improve private sector participation in the sector.

Author: HealthBox Group

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