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Challenges of Healthcare Financing in Nigeria

Submitted by on August 8, 2013 – 6:21 AM One Comment

nigeria_fistulaThe existence of widespread socio-economic inequality and poverty in Africa pose great challenges to the health and healthcare development. Some of these challenges include vulnerability to disease, revenue generation, and health care seeking behavior, access to care, efficiency, and utilization of services due to out-of-pocket payments has remained a problem in most parts of Africa which Nigeria is no different. Like every other health care financing system in the world, Nigeria health care financing system involves the means in which funds are generated (collecting revenues), allocated (pooling resources), and utilized (purchasing services) for health care [1]. These three basic functions of collecting revenues, pooling resources, and purchasing services are implemented through by tax revenue, out-of-pocket payments, donor funding, and health insurance (social and community) [2].


In view of the above issues raised, the primary focus of this paper is to holistically examine Nigerian healthcare financing and health policy with a view of highlighting major gap or lapses and proffer necessary policy framework that is pragmatic and affordable by the citizens. Though these above methods of health financing are not mutually exclusive however, out of pockets payment has over the years accounted for the highest proportion of health expenditure in Nigeria. From available statistics, between 1998 to 2002, out of pocket expenditure as a proportion of health care payment accounted for 64.59% for total health care expenditure, in 2003 it accounted for 74% of the (total health expenditure) while it decreased to 66% in 2004 and later increased to 68% in 2005 thus implies that households bear the highest burden of health expenditure in Nigeria [3].


Furthermore, some of the reasons for the huge disparity in percentage within the various forms of health care financing could be attributed to very low budgetary allocation of below 15% as compared to other countries [4], inappropriate and inadequate health insurance scheme which at the moment is estimated to have covered just above 5 million which is equivalent to an estimated 3% of Nigerian population. Furthermore, due to the high level of poverty in Nigeria and nature of lifestyle, many poor people cannot afford either health insurance premium or make health care payments at the point of utilization.


Despite the focus of the issue of out-of-pocket payments for health services, another issue of concern is the poor infrastructural shape of our public hospitals which at the moment requires a huge financial effort to resuscitate them to standard coupled with inexperience among some staff/ low manpower to meet the challenges of our daily healthcare needs, which study reveals is the reason for some Nigerians seeking medical attention overseas and also staff attitude which in most instance has been paid less attention. These reasons could be inferred to be part of the reasons for the low level of enrollment in the health insurance, bearing in mind that enrollment in the scheme is the first step to evaluating the success of an insurance scheme. This position is further supported by a study which suggested that without accompanying visible quality improvement, user fees and out-of-pocket payment for those who can afford it would result in lower utilization of health care services [5].


Health care financing has in recent times has received extensive research and policy attention in both developed and developing countries. Though research evidence from all over the world suggests that equity of access is greater when health care is funded through taxation or social health insurance than when funded from private health insurance or out-of-pocket payments, which according to the WHO (2000) report ranking of National Health System performance in their effort to achieve good health, responsiveness to the expectations of the population and fairness of financial contribution, placed France with social insurance in the 1st position out of 191 countries and placed Nigeria with her recently introduced NHIS in 187th position [6]. However, current evidence-based studies from Nigeria suggest that it might be pretty difficult to adopt the system of out-of-pocket payment for health services due to the level of poverty and health inequality that is already experienced by many.


Thus, this article concludes by recommending the need for Nigeria to explore and strengthen other mechanisms of health system and shift focus from out-of-pocket payments, address the issues that have undermined public health care financing in Nigeria, improve on evidence-based planning, and prompt implementation of the National Health Bill when signed into law.




1. Olakunde BO. Public health care financing in Nigeria: Which way forward?. Ann Nigerian Med 2012;6:4-10


2. Gottret P, Schieber G. Health Financing Revisited: A Practioner′s Guide. Washington DC: The International Bank for Reconstruction and Development/The World Bank; 2006.


3. Soyibo A, Olaniyan O, Lawanson AO. National Health Accounts of Nigeria 2003-2005: Incorporating Sub-National Health Accounts of States. Main report submitted to Federal Ministry of Health. Ibadan: University of Ibadan; 2009.


4. World Health Oranization. WHO Country Cooperation Strategy: Nigeria 2008-2013. Brazzaville: WHO Regional office for Africa; 2009.


5. Uneke CJ, Ogbonna A, Ezeoha A, Oyibo PG, Onwe F, Ndukwe CD. User fees in health services in Nigeria: The health policy implications. Internet J Health 2009; 8:2


6. The World health report 2000: health systems: improving performance (cited 27th July, 2013)-


About the Author: Uzum Emmanuel Kidochukwu is a consultant in Public Health issues with particular focus on monitoring and evaluation. She can be reached at [email protected]

About this article: This article is competing for the JPMS International Medical Writing Contest 2013

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  • Elena Andreu

    Nice article!! hope the government of Nigeria takes step to achieve universal coverage of Healthcare Insurance in Nigeria.