Health-related expenses push over 1 million Nigerians into poverty yearly – World Bank report

Health-related expenses push over one million Nigerians into poverty every year, according to the World Bank’s Human Capital Public Expenditure and Institutional Review. 

The report provides an analysis of the financing and governance constraints affecting the delivery of basic education and primary health care in Nigeria. 

According to the report, Nigeria ranks poorly in Universal Health Coverage (UHC) within Africa, with an index score of 44. 

Despite some progress, Nigeria’s UHC remains among the lowest on the continent, reflecting the limited coverage of essential health services. 

The report read: “Nigeria ranks near the bottom in Africa in Universal Health Coverage. With a score of 44, Nigeria’s Universal Health Coverage (UHC) index has seen some improvement over time but still ranks among the lowest in the African region. 

“The coverage of essential health services remains limited, and the proportion of health expenditures financed by out-of-pocket payments is the highest in the region, which is indicative of the country’s poor health outcomes. Despite some progress in recent years, the pace of improvement in Nigeria’s health indicators lags behind that of other African nations. For example, the increase in life expectancy in Nigeria has been more gradual compared to other countries on the continent.” 

77% of health spending is out-of-pocket payments  

The report further showed that out-of-pocket payments account for 77% of Nigeria’s total health expenditures, the highest in the region. 

This heavy reliance on personal payments places a substantial financial burden on households, pushing over a million Nigerians into poverty annually. 

Also, many Nigerians forego necessary medical treatments due to prohibitive costs, leading to further deterioration in health outcomes. 

Low public health spending 

A significant portion of Nigeria’s limited public health funds, which account for just 0.5% of the Gross Domestic Product (GDP), is allocated to secondary and tertiary care facilities. 

This allocation strategy neglects essential preventive, public health, and primary health care services, which are more cost-effective and impactful on overall health outcomes.  

Consequently, scarce resources are diverted away from critical preventive services, resulting in high out-of-pocket expenses and posing substantial barriers to accessing care, particularly for economically disadvantaged populations. 

The report noted: “Nigerian government’s health expenditure of just 0.5 per cent of GDP, ranking it among the lowest globally. Out-of-pocket payments dominated Nigeria’s health care financing, accounting for 77 per cent of total health expenditures. Such a high reliance on out-of-pocket payments has several adverse effects, one of the most significant being the financial burden it places on households. On average, health-related expenses push more than 1 million Nigerians into poverty each year. Additionally, the prohibitive cost of care leads many to forego necessary medical treatments. For those who manage to avoid falling below the poverty threshold, a substantial number still face catastrophic health expenditures, with a quarter of Nigerians experiencing such financial strains annually. 

“The limited public funds allocated to health in Nigeria are predominantly directed toward secondary and tertiary care facilities, with a significant portion of the budget being spent on curative services within these higher-level hospitals. This allocation strategy overlooks the crucial areas of prevention, public health, and primary health care, which are both cost-effective and have a high impact on overall health outcomes.” 

What you should know 

• 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.