Mandatory health insurance to ease access to care in Nigeria

While Nigeria has made notable progress on several major wellness indicators in recent years, the country is grappling with health and social consequences stemming from the Covid-19 pandemic, in addition to structural challenges related to its public health system and the rollout of universal health care (UHC). However, with Nigeria’s large and young population, and plentiful natural resources, the longer-term prospects for investment in the sector remain promising, with the pandemic creating new opportunities for innovation from the private sector.

Structure & Oversight

The Federal Ministry of Health (FMH) is the main government body responsible for providing health services for all citizens, with a mandate to implement policies to strengthen the national health system in order to deliver affordable services in partnership with multiple stakeholders. The ministry oversees a number of departments, units and agencies, including the Department of Public Health (DPH), which formulates public health policy and guidelines, and then evaluates their impact on the sector; the National Primary Health Care Development Agency (NPHCDA); the Department of Health Planning and Statistics; the National Agency for Food and Drug Administration and Control ( NAFDAC); the Nigeria Centre for Disease Control (NCDC); and the National Health Insurance Scheme (NHIS). The FMH also oversees a number of health-related programmes such as the National AIDS, STI and Hepatitis Control Programme; the National Tuberculosis and Leprosy Control Programme; and the National Malaria Elimination Programme.

Another role of the federal government in the health care sphere is to provide a regulatory framework in collaboration with the health systems of individual states and local governments. Nigeria’s 36 states and state-controlled local government entities are responsible for primary and secondary health care services, mainly by managing general hospitals and primary health care centres. According to the FMH’s facility breakdown as of mid-2021, there are 40,368 operational hospitals and clinics across Nigeria, including 10,900 private facilities (27% of the total) and 29,468 public facilities (73% of the total). Of all the hospitals and clinics, 85.2% are primary care facilities, 14.4% offer secondary care and 0.4% are for tertiary care.


Sector policy is guided by the National Health Promotion Policy, which was last revised in 2019. The document sets overall standards and provides guidance on best practices regarding health promotion at all levels. In December 2020 Dr Osagie Ehanire, the minister of health, held a press briefing to present the country’s 2021 health roadmap. He outlined government measures to fulfil the objectives of the National Strategy Health Development Plan II (NSHDP II) 2018-22 and President Muhammadu Buhari’s Health Sector Next Level Agenda (HSNLA), a nine-point, medium-term plan created in 2019 to improve health services.

The NSHDP II focuses on strengthening the health care system as a whole while prioritising primary care, and the HSNLA aims to make headway on UHC, among other initiatives. The agenda, in particular, seeks to implement mandatory universal health insurance across all states; operationalise the Basic Health Care Provision Fund (BHCPF); recruit and deploy around 50,000 community health extension workers; upgrade government teaching hospitals; partner with the private sector to build high-quality hospitals; reduce gaps in the country’s health-related UN Sustainable Development Goals by at least 60%; address the imbalance between primary, secondary and tertiary health care provision; collaborate with the private sector to create job opportunities; and lift 100m Nigerians out of poverty by 2030.

At the December 2020 briefing, Faisal Shuaib, the executive director of the NPHCDA, said that primary health care services were only catering to around 20% of the population, as opposed to the goal of at least 70%, with the majority relying on secondary and tertiary care. Looking at the years to 2030, the NPHCDA has outlined a new agenda that includes upgrading primary health services across the country; leveraging technology such as telemedicine and drones to strengthen data management, supply chains and vaccination rollouts; and scaling up health care promotion to encourage behavioural change among the population.

Public Spending

To achieve these goals, the federal government allocated 4.5% of the 2021 budget to health care, a value of approximately N600bn ($1.6bn). Of this, N549.8bn ($1.5bn) was earmarked for the FMH, including N35bn ($93.5m) for the BHCPF; N45.2bn ($120.7m) for vaccine and immunisation programmes; and N5.5bn ($14.7m) for donor-supported programmes. The 2021 FMH budget is 33% higher than the revised 2020 budget, which underwent restructuring in the middle of the year and saw spending on primary health care services and the BHCPF cut by more than 40% to N25.5bn ($68.1m) due to the drop in international oil prices and the toll of Covid-19 on the economy. The 33% rise compares favourably to the overall federal budget increase of 21%, and the capital expenditure amount of N135bn ($360.5m) is the highest ever. However, the country has never reached the target of allocating 15% of its budget to health as outlined in the 2001 Abuja Declaration.

Inadequate government spending on health services in the years leading up to the Covid-19 pandemic left the country somewhat vulnerable, with a delayed response and limited testing at the beginning of the outbreak. Now, in 2021, there are concerns that conflicting information may slow the process of vaccine deployment (see analysis). In March 2020, at the start of the pandemic, the government projected that it would need $330m to combat the virus, and largely raised funds through the private sector. Just a few months later, in July 2020, pooled resources amounted to $560.5m, with approximately 90% coming from private donations.

UHC & Insurance

In addition to the intention to improve the quality of medical care and expand and upgrade health infrastructure, the government is looking to reduce barriers to insurance coverage. The NHIS, first established in 1999, aims to improve the health of all Nigerians through the provision of affordable services and a variety of repayment schemes, ultimately reaching universal coverage. The system is based on a pre-payment plan through which members pay regular fixed amounts to health maintenance organisations (HMOs). There were a total of 61 HMOs regulated by the NHIS as of mid-2020, including both public and private operators.

While public outreach and advocacy efforts are ongoing, accessing health care remains a challenge for many Nigerians due to a high prevalence of poverty. Indeed, around 10m Nigerians – or 5% of the population – were enrolled in the programme as of early 2021, according to the NHIS, with the majority of the population financing their health care through out-of-pocket expenditure. One major obstacle to achieving a higher participation rate is the scheme’s non-mandatory nature, and while most civil servants are covered under the NHIS, the large informal sector has made it difficult to increase penetration.

To overcome this, the Senate passed a bill in late 2020 to make health insurance mandatory for all Nigerians. In a similar spirit, early that year the NHIS launched the Health Insurance Under One Roof strategy to fast-track UHC. The strategy aims to decentralise the NHIS to avoid administrative bottlenecks and give more autonomy to each state to establish its own health insurance agency, as well as operationalise the e-NHIS platform, secure political support for the programme, and focus on domestic and sustainable financing. Nasir Sambo, the executive secretary of the NHIS, told local media in March 2021 that the scheme aims to enrol 20m Nigerians annually for the next 10 years.

General Indicators

According to the 2021 Africa Sustainability Index by the FutureProofing Healthcare initiative, Nigeria’s health care system ranks 14th out of 18 African countries studied across six performance indicators. The group noted that there was “considerable room for improvement with respect to the health status of the Nigerian population”, in addition to “a considerable deficit in the availability of health care personnel, combined with allied factors such as poor access to clean water, political instability and adult gender literacy gaps which accentuate the problems in the ecosystem”. Nigeria’s best performance was in the health status category, while it scored lowest on the access metric.

The country has improved in several major indicators over recent decades, however, with the World Bank reporting that life expectancy at birth increased by 19% from 46 years in 1998 to 54.7 years in 2019. Furthermore, according to the “2018 Nigeria Demographic and Health Survey”, published in collaboration with the FMH, the UN and the World Health Organisation (WHO), among others, the under-five mortality rate was 132 per 1000 live births, down from more than 200 in the early 2000s. Early childhood mortality stems mainly from preventable diseases such as malaria, malnutrition, diarrhoea and measles. Malaria, in particular, is one of the top public health issues in Nigeria, accounting for 25% of all cases worldwide and putting additional strain on the public health system. Measles cost around N480bn ($1.3bn) in out-of-pocket expenses, prevention expenditure and working hours in 2014, according to the FMH. HIV/AIDS also remains a significant health issue in the country, with HIV prevalence in adults recorded at approximately 1.4% in 2019, according to government statistics. The health system has made steady progress in terms of increasing access to treatment, with the number of people with HIV having access to anti-retroviral therapy increasing from 360,000 in 2010 to over 1m in 2018.

Non-communicable diseases (NCDs) remain the primary cause of death in the country. According to the WHO, NCDs accounted for 29% of all deaths in Nigeria in 2018 – led by heart disease (11%), cancer (4%), chronic respiratory disease (2%) and diabetes (1%). World Bank figures put NCD deaths at 27% of the total in 2019, up from 20.5% in 2000 and 24% in 2010. The rise in NCDs since the beginning of the century has been attributed to longer life expectancy, in addition to poorer diets, less exercise, air pollution, and alcohol and tobacco use.

Private Initiatives

As with many countries around the world, Nigeria finances health care delivery through a combination of public and private sector initiatives. Public-private partnerships (PPPs) in the health sector came after the government crafted the 2005 National Policy on PPP for Health, which initially aimed to address the country’s high infant and maternal mortality rates.

In 2020 the health infrastructure gap amounted to some N3.7trn ($9.9bn), illustrating that the federal and state governments are unable to cater to the growing health needs of the population. The deficit has led to an increase in outgoing medical tourism, with Nigerians estimated to be spending approximately $1bn annually on treatment abroad, in addition to brain drain as trained medical personnel look for more lucrative opportunities outside the country. As a large share of the government health budget goes towards recurrent expenditure – and is highly dependent on fluctuating oil prices in international markets – there is ample opportunity for private sector participation in capital projects, such as upgrading facilities. There are already a number of hospitals that operate under a PPP model in the country, including Garki Hospital Abuja, Lagos University Teaching Hospital, Ibom Specialist Hospital in Akwa Ibom, Lagos State University Teaching Hospital and University College Hospital Ibadan.

The Covid-19 pandemic has expanded the opportunities to address medical shortcomings: there is a plan to build 14 medical centres and upgrade two intensive care units across the country’s six geopolitical zones that the private sector can participate in. The $58m project, which was announced in mid-2020, will be partially financed through the state-owned Nigerian National Petroleum Corporation, with the rest to come from private financing. Furthermore, an initiative called Adopt a Health Care Facility, first conceived in 2019 by private sector stakeholders and ramped up during the pandemic in 2020, aims to establish market-based, low-cost, primary health care centres across Nigeria’s 774 local government areas to provide services to uninsured residents. The programme is being led by the Private Sector Heath Alliance of Nigeria in partnership with the Africa Business Coalition for Health, the Bill & Melinda Gates Foundation, the UN Economic Commission for Africa, the World Bank and the International Finance Corporation, among others.

Research & Pharmaceuticals

Private players are also in a position to invest in biomedical research, as more robust, high-quality domestic health research is seen as an avenue to expedite the development of the sector. In 2002 Nigeria was one of 10 African countries to endorse a target of allocating 1% of GDP to research and development (R&D); however, the country has fallen short in recent years, with the government pledging to spend 0.5% of GDP on R&D in 2021. The Covid-19 pandemic highlighted the need for further R&D to combat health issues as they arise. Government agencies including Lagos State Biobank and the Nigerian Institute of Medical Research are involved in genome-sequencing efforts, and the Lagos State Government commissioned a $4.5m biobank laboratory in partnership with the government of Canada in October 2018. Moreover, 54gene, a Nigerian biotech start-up that focuses on genome sequencing, attracted $20m from Silicon Valley in 2020 for genetic research.

Meanwhile, Nigeria’s pharmaceutical industry was worth $1.4bn in 2016, with the potential for its value to reach $4bn by 2026 at an annual compound growth rate of 11%, according to a 2017 report by consultancy firm McKinsey. Nigeria has around 115 pharmaceutical firms that produce analgesics, antimalarials, antibiotics, anti-retrovirals and vitamins for the domestic market and neighbouring countries. However, as of 2020 the country was still dependent on imports for around 70% of its drugs – mainly purchased from China and India – and also imported many of the active ingredients and equipment used in manufacturing. The need for private sector involvement to increase local production capacity came to the fore with the onset of the Covid-19 pandemic.

Counterfeit medicine is another issue, with the WHO estimating that Africa accounted for 42% of the world’s fake drugs. However, public and private sector initiatives to combat this are making gains: in the decade leading to 2020 the prevalence of counterfeit drugs dropped from around 30% of the total to less than 10%, according to mPedigree, a Ghanaian company that allows consumers to check the authenticity of medicine via text message. In Nigeria health tech start-up Medsaf links manufacturers directly to hospitals and pharmacies, and ensures pharmaceutical authenticity, while the NAFDAC conducts medicine and supply chain monitoring.


Given the mismatch between health infrastructure needs and public funding, there is wide scope for private sector participation in capital projects moving forwards. Providing higher-quality services at new and existing facilities, and offering supportive financing can help to address the limitations of the public system, and may ultimately lead to more Nigerians staying in-country for treatment.

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The Report: Nigeria 2022

Health and Education chapter from The Report: Nigeria 2022

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