Economic Update

Published 28 Jun 2016

In May the Nigerian Sovereign Investment Authority (NSIA), in partnership with the federal Ministry of Health (MoH), signed a series of agreements to modernise and expand health care services through private sector participation.

The agreements look to develop the capacity of specialist hospitals and diagnostic centres to ensure they are able to provide advanced medical care services. As of late May, a total of ten memorandums of cooperation had already been signed between the NSIA, the MoH and various heath care facilities throughout the country’s six geopolitical zones, with six of the agreements already in advanced stages. 

Examples include agreements with Lagos University Teaching Hospital to develop a specialist cardiovascular facility in Lagos, with Kano-based Aminu Kano Teaching Hospital to build a modern diagnostic centre and with the Federal Medical Centre Umuahia to develop a diagnostic centre in the main hospital complex in Abia State.

The broader aim of the agreements is to help channel an as-yet-undetermined amount of public funds into health care institutions as well as to boost technical cooperation links between private hospitals and federal health care centres in an effort to expand institutional capacity across the sector.

Public reforms

Allocating more funding for health-related infrastructure and facilities is a key priority for Nigeria, with the government earmarking 4.3% of the 2016 federal budget to health care. According to the World Health Organisation (WHO), Nigeria spends only $67 per person on health care, whereas South Africa allocates seven times as much and Angola three times as much.

However, in addition to its collaboration with the NSIA, the MoH has also set ambitious new targets to increase access to health facilities, with a specific aim to increase the number of primary health care centres (PHCs).

As part of its goal to ensure access to health care for 100m Nigerians, the MoH aims to build 10,000 PHCs throughout the country by 2018, with at least one PHC per ward – an administrative unit with 10,000 people – to facilitate health care access across a wide geographic area.

“The PHCs will be able to take care of 80% of cases requiring medical attention, with patients required to register at their nearest PHC,” Isaac Folorunso Adewole, minister of health, told OBG.

Boosting health insurance

In addition to improving the quality of care and expanding infrastructure, the government is also looking to reduce barriers to insurance coverage.

Although Nigeria’s National Health Insurance Scheme (NHIS), introduced in 1999, aims for universal coverage, penetration remains persistently low. Less than 5% of the population is currently enrolled in the NHIS, and an estimated 120m Nigerians currently do not have health insurance coverage, according to local media, while other sources cite even less at just 10% of the population.

One major impediment to increasing participation rates is the non-mandatory nature of health insurance in Nigeria, according to Femi Akingbade, acting executive secretary of the NHIS.

While the bulk of employees in the federal civil service are currently subscribed to the scheme, the NHIS has yet to capture a majority of citizens, including those individuals working in the country’s large informal sector, Akingbade told local media.

Stakeholders in the health insurance sector – such as the NHIS and health maintenance organisations (HMOs) – are also calling for legislation that would make it mandatory for employers with more than 10 employees to provide health insurance.

Meanwhile, the competitive nature of the insurance market means that HMOs often cut prices in an attempt to gain market share, which in turn results in poorer quality services for patients. According to the NHIS, there are 40 accredited HMOs in Nigeria, with each vying for greater market share.
“Competition on prices rather than value and quality of services is an unhealthy trend for both HMOs and their customers,” Nick Zaranyika, CEO of Total Health Trust, told OBG.

Industry trends

The push to improve the quality and reach of Nigeria’s health care services in order to reduce outbound medical tourism, which costs the local economy up to $1bn in capital outflows, received new focus following President Muhammadu Buhari’s trip to London to seek treatment for an ear infection.

The trip was met with criticism by some segments of the health industry, as Nigeria has over 250 ear, nose and throat specialists. However, there is a wider lack of qualified medical professionals in Nigeria, with the country having 35,000 doctors despite needing 237,000, according to WHO figures, which is partially impacted by the country’s brain drain.

Dr Osahun Enabulele, vice-president of the Commonwealth Medical Association, pointed out that the UK had over 3000 Nigerian-trained doctors while the US had more than 5000, according to press reports, underlining an on-going trend of Nigerian-qualified doctors choosing to practice elsewhere.

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