Nigerian health sector has plunged back into recession after managing to exit with a 0.42 percent growth in the second quarter of 2018.
In the last two quarters of 2018 (Q3, Q4), the sector recorded a negative growth at -0.68 and -0.64 percent, respectively, after recording a positive 0.42 percent growth in Q2, 2018, as poor government funding, weak demand and a lack of investment have crippled growth in the sector.
“The health sector has suffered from chronic underfunding for many years now. We are even behind South Sudan, Angola and Ethiopia,” Isaac Adewole, health minister, said.
Since the second quarter of 2017 till date, the health sector has recorded a negative growth that has averaged -0.47 percent, alongside the educational sector being tipped as the major driver of human capital development.
Despite this, many of Nigeria’s key health interventions including on polio eradication, vaccination programmes, malaria, tuberculosis, HIV/AIDS, and maternal and child health remain almost completely dependent on foreign donors, with the government committing just $5 per citizen to health under its current budget.
“The sector is suffering from weak consumer spending on the purchase of health services,” Gbolahan Ologunro, an equity research analyst at Lagos-based CSL, said.
Real GDP growth in Africa’s largest economy expanded 1.93 percent in full-year 2018 from 0.83 percent and -1.58 percent in 2017 and 2016, respectively, thanks to the Federal Government diversification initiative that saw non-oil sector expand 2 percent in 2018 from 0.47 percent in 2017, at the time the country exited its worst recession in 27 years.
While a rapid expansion might have been felt in the overall GDP growth, this could not be said of the health sector as growth in real term stood at -0.32 percent in the full year 2018.
About half of Nigerians population at 198 million live on less than $1.25 a day (‘Poverty Head-count’), making the country overtake India to be the poorest in the world, with six persons out of its entire population entering the poverty trap, according to recent report by Brookings Institution, a non-profit public policy organisation in the US.
As of February 2018, the country was ranked 187 out of 191 countries in the world in assessing the level of compliance with the Universal Health Coverage (UHC), as very few of the populace is health insured.
Biodun Awosusi, a physician and health economist, on his twitter handle, said, “Without substantial increases in domestic investments in health, and a radical change in the way health is harmonised to domestic and continental priorities, we will soon lose any realistic chance of reaching these objectives of universal Health coverage.”
Not even the pharmaceutical sector has been spared from a frail economy, where a high inflation rate alongside increasing unemployment have taken a hard bite on consumers purchasing power, making them sought after traditional health care treatments.
Drug makers have complained drop in sales as high as 55 percent with many closing or divesting operations as consumers cut down on spending.
With out-of-pocket payments for health causing households to incur catastrophic expenditure, which in turn can push them into poverty whereas the private expenditure on health as a percentage of total health expenditure is 74.85 percent.
The implication of this is that government expenditure for Health is only 25.15 percent of all the money spent on health all across the nation.
Of the percentage spent on health by the citizens (74.85%), about 70 percent is spent as out of pocket expenditure to pay for access to health services in government and private facilities. Most of the remaining money spent by citizens on their health is spent in procuring ‘alternative’ remedies of dubious value.
“The sector has also been faced with poor private sector investment alongside poor budgetary allocation, which has averaged about 4 percent since President Buhari came on board,” Ologunro said on phone.
A private sector-driven investment climate and mandatory health insurance appears to be the solution to Nigeria’s debilitating health sector as the government appears incapable of providing an environment for quality healthcare delivery in the country.
BusinessDay findings have shown that the National Health Insurance Scheme has since 2014, barely captured 4 million Nigerians (working in the civil service), with private sector insurers having about 4.5 million enrollees. Industry sources, however, opine that, when health insurance is made compulsory, market-driven, and properly regulated, the resulting competitiveness will be the making of a new health sector in Nigeria.
Nigeria’s incumbent president Mohammadu Buhari, who is seeking a re-election in the most populous black nation has promised in his policy document, a health Insurance for the citizenry using co-payments to share the cost between individuals, the private sector and government, despite the sector entering its most critical state under his first term in office.
His main challenger, Atiku Abubakar, has pledged to commit 15 percent of the national budget to health and also open up the economy to attract foreign direct investment into space.
