A Mathematical Model to Analyze the Effects of Nigeria’s Deregulated Economy on Healthcare Funding

Background: Nigeria’s deregulated economy, initiated in 2023 through fuel subsidy removal and exchange rate unification, has fundamentally altered the fiscal environment with significant implications for healthcare financing. This study develops a mathematical model to quantify the relationship between deregulation‑induced macroeconomic changes and healthcare funding outcomes.
Methods: A system dynamics model incorporating macroeconomic and fiscal variables was constructed using ordinary differential equations. The model integrates oil revenue, non‑oil revenue, exchange rate, inflation, fiscal deficit, and healthcare allocation. Data from 2020–2025 were used for parameter estimation. Sensitivity analysis and scenario modeling assessed policy impacts.
Results: The model reveals a structural break in healthcare funding dynamics post‑deregulation. The derived equation H = αR_total + βΔER + γπ + δFD demonstrates that a 10% naira depreciation reduces real healthcare spending by 6.2% (p<0.001). Under moderate shock scenarios, projected healthcare funding shortfalls range from ₦380–620 billion annually. The model identifies an optimal fiscal rule: allocating 15% of oil windfall revenues to a Health Stabilization Fund would reduce funding volatility by 42% (95% CI: 35–49%). Sensitivity analysis shows health outcomes are most responsive to primary healthcare funding (elasticity 0.68) compared to tertiary care (0.31). The post‑deregulation coefficient for health share of oil revenue decreased from 0.038 to 0.032 (p=0.02), reflecting competing expenditure priorities.
Conclusion: Mathematical modeling demonstrates that deregulation creates competing fiscal pressures on healthcare funding through exchange rate effects, inflationary erosion, and competing expenditure priorities. The findings support establishment of a Health Stabilization Fund linked to oil windfall revenues and constitutional guarantees for primary healthcare funding.

Deregulation, healthcare funding, mathematical model, fiscal policy, Nigeria

1. Federal Ministry of Finance. 2026 Budget Implementation Report. Abuja: FMF; 2026. [Google Scholar] [Crossref]

2. Nigerian Law Teachers Forum. Tinubu Strips NNPCL of Revenue-Deduction Powers in Major Oil Sector Shake-up. NALTF. 2026 Feb 17. [Google Scholar] [Crossref]

3. World Health Organization. Health financing – Nigeria Health System and Services Profile. Geneva: WHO; 2025. [Google Scholar] [Crossref]

4. Abubakar I, Dalglish SL, Angell B, et al. The Lancet Nigeria Commission: investing in health and the future of the nation. Lancet. 2022;399(10330):1155-1200. [Google Scholar] [Crossref]

5. African Union. Abuja Declaration on Health Financing. Addis Ababa: AU; 2001. [Google Scholar] [Crossref]

6. BusinessDay. Tinubu reneges, fails to raise health budget to 10%. BusinessDay. 2026 Jan 12. [Google Scholar] [Crossref]

7. ThisDayLive. FG: Health Sector Performance Not Yet at Optimal Level, Reels Out Statistics. ThisDayLive. 2025 Nov 14. [Google Scholar] [Crossref]

8. International Monetary Fund. Nigeria: Staff Report for the 2025 Article IV Consultation. Washington, DC: IMF; 2025. [Google Scholar] [Crossref]

9. World Bank. Nigeria Development Update: Navigating Global Headwinds. Washington, DC: World Bank; 2025. [Google Scholar] [Crossref]

10. Oduyemi GO, Lawal NA, Osinusi KB. Dynamics of Nigeria’s Fiscal Policy Responses to Oil Price Shocks: Implications for Revenue Stabilization, Public Health Outcomes, and External Debt Sustainability. Ife Social Sciences Review. 2025;33(1):127-143. [Google Scholar] [Crossref]

11. Iheoma CG. Effect of economic uncertainty on public health expenditure in Economic Community of West African States: Implications for sustainable healthcare financing. 2022. [Google Scholar] [Crossref]

12. Verguet S, Jamison DT. Health economic modeling for universal health coverage. Health Econ. 2021;30(8):1865-1882. [Google Scholar] [Crossref]

13. Uzochukwu BS, Ughasoro MD, Etiaba E, et al. Health care financing in Nigeria: Implications for achieving universal health coverage. Niger J Clin Pract. 2015;18(4):437-44. [Google Scholar] [Crossref]

14. Nigerian National Petroleum Corporation Limited. Monthly Oil and Gas Report. Abuja: NNPCL; 2026. [Google Scholar] [Crossref]

15. BusinessDay. Senate cuts oil benchmark to $60, passes 2026–28 MTEF/FSP to cushion global shocks. BusinessDay. 2025 Dec 16. [Google Scholar] [Crossref]

16. Central Bank of Nigeria. Statistical Bulletin 2025. Abuja: CBN; 2026. [Google Scholar] [Crossref]

17. National Bureau of Statistics. Consumer Price Index Report. Abuja: NBS; 2026. [Google Scholar] [Crossref]

18. National Bureau of Statistics. Gross Domestic Product Report. Abuja: NBS; 2026. [Google Scholar] [Crossref]

19. International Energy Agency. Oil Market Report – March 2026. Paris: IEA; 2026. [Google Scholar] [Crossref]

20. World Bank. Commodity Markets Outlook. Washington, DC: World Bank; 2026. [Google Scholar] [Crossref]

21. Nairametrics. Debt service gulps 72% of FG revenue in seven months. Nairametrics. 2025 Dec 18. [Google Scholar] [Crossref]

22. Cashin C, Sparkes S, Bloom D. Earmarking for health: from theory to practice. Geneva: WHO; 2017. [Google Scholar] [Crossref]

23. Botswana Ministry of Finance. Pula Fund Annual Report. Gaborone: MOF; 2023. [Google Scholar] [Crossref]

24. Hone T, Macinko J, Millett C. The impact of primary health care on health outcomes in low- and middle-income countries: a systematic review. Health Policy Plan. 2021;36(4):506-520. [Google Scholar] [Crossref]

25. Federal Ministry of Health. National Health Policy 2021–2030. Abuja: FMOH; 2021. [Google Scholar] [Crossref]

• Impact of Foreign Direct Investment in India
• Issues Involved in Digitalisation Special Reference to Indian Tourism Growth
• Relationship Marketing and Customer Loyalty in the Fast-Moving Consumer Goods (FMCG) Industry in Nairobi County
• Financial Literacy or Financial Inclusion? Which is Which, What is What—To Achieve Uganda’s 10-Fold Economic Growth By 2040
• Harnessing Natural Gas for Economic Transformation: Overcoming the Regulatory and Infrastructural Bottlenecks in Nigeria