Innovative Financing Options for Health Care in Nigeria: Implications for achieving Universal Health Care Coverage (UHC)
- May 8, 2020
- Posted by: RSIS
- Categories: Economics, IJRISS
International Journal of Research and Innovation in Social Science (IJRISS) | Volume IV, Issue IV, April 2020 | ISSN 2454–6186
Rifkatu NGHARGBU, PhD1, Fadila JUMARE, PhD2
1,2Department of Economic Development and Social Studies, National Institute for Legislative and Democratic Studies, National Assembly Abuja, Nigeria
Abstract: – Recent global health challenges due to coronavirus (COVID-19) epidemic point to the fact that health system strengthening through health financing is indispensable. Government expenditure on the health sector based on budgetary allocation is very low at less than 6% compared to the recommended 15% by the Abuja Declaration. However, innovative health care financing is a winning way to raise revenue to enhance health care delivery for the achievement of Universal Health Care Coverage (UHC). This paper examined the prospects of various innovative financing options for the health sector that Nigeria can leverage on as alternative ways to finance the health sector. This was carried out by reviewing different options in terms of its components, justification, income generating capacity and implementation strategies. Some of the options include; Excise taxes on foods high in salt, fat or sugar contents, levies on mobile phone use, currency/financial institutions levies, sintaxes on consumption of tobacco, alcohol and hard drugs, luxury items, diaspora funds and catastrophic health fund. Cross country analysis was carried on the various identified financing options. Drawing inspiration from any or hybrid of the country models surveyed in this paper, Nigerian National Assembly (NASS) can establish an act to facilitate innovative financing for the Nigerian health sector.
I. INTRODUCTION
Quality and affordable health care is a major challenge in many developing countries, including Nigeria. Despite efforts by government and donor agencies to improve health care affordability, many Nigerians still find it difficult to access quality health care because they suffer financial hardship. At present, out of pocket expenditure as a percentage of private and overall health expenditure in Nigeria stands at 95% and 69%, respectively. Health expenditure by National Health Insurance Scheme (NHIS), Federal Ministry of Health (FMoH), State Ministry of Health (SMoH) and Local Governments Health Departments stands at 2%, 7%, 5% and 7% to overall health expenditure, respectively (Aregbeshola and Khan 2010; Uzochukwu et al 2015). This implies that out of ₦35,000 health expenditure per head in the country, the government only contributes ₦1,000 per citizen. The rest is either paid out of pocket by individuals as user fees or through the NHIS.
Furthermore, budgetary allocation for the health sector as a percentage of total budget is very low compared to the recommended 15% by the Abuja Declaration. Figure 1 shows that since 2010, budgetary allocation for health as a percentage of total Federal budget has fluctuated: 3.73% in 2010, 5.58% in 2011, and 6.03% in 2012 and 4.14% in 2020. This level of expenditure is well below the Abuja Declaration benchmark of 15%.
