The size of India‘s healthcare sector is estimated to have leaped 300 percent to $260 billion from 2012 to 2020. Even with 1.35 billion people, the country’s health expenditure is 3.6 percent of its gross domestic product (GDP).
There is no data on the size of Nigeria’s healthcare sector, but Africa’s most populous nation’s budget for health in 2020 amounts to a mere 0.06 percent of the GDP.
Healthcare expenditure in the US is estimated at 16.9 percent of the GDP, 11.2 percent in Germany, 11.2 percent in France and 10.9 percent in Japan.
Without doubt, there has been increased spending in the Nigerian health sector this year, induced by the COVID-19 pandemic, but analysts know it will be déjà vu after a vaccine is discovered for the virus.
Due to poor infrastructure in Nigeria’s healthcare industry, the rich travel abroad for medical treatment, with annual medical tourism estimated by Nigeria at $1 billion.
Onwufor Uche, director of the Gynae Care Research and Cancer Foundation in Abuja, told Al Jazeera recently that more than half of those seeking visas to India were going for medical care that was not available here in Nigeria, stressing that poor Nigerians would be at the mercy of the dilapidated decrepit health infrastructure.
Health infrastructure in Nigeria is poor and medical personnel are under-paid and owed many months by federal and state governments, prompting them to leave for advanced countries where their services are appreciated. At least 7,875 Nigerian doctors are currently practising in the United Kingdom, according to the UK’s General Medical Council, and 4,000 are in the USA.
Saudi Arabia is luring Nigerian doctors with $4,500 (over N2m) per month as salary compared with N100,000 to N200,000 received by most doctors in the country.
A recent NOI Polls survey reveals that well over 20,000 Nigerian doctors are currently working outside the country. The survey also notes that 80 percent of Nigerian doctors working in the country are seriously considering leaving.
Nigeria has one doctor to 6,000 people, according to estimates, as against WHO’s recommendation of one to 600 people.
A poll citing the Medical and Dental Council of Nigeria (MDCN) reports that there are about 72,000 nationally-registered Nigerian doctors, with only 35,000 practising in-country. Estimates say there is a deficit of over 260,000 doctors in Nigeria and a minimum of 10,605 new doctors need to be recruited annually to meet global targets.
More than 82.9 million Nigerians depend on less than $1.9 per day for survival amid inflation of 12.8 percent and a Covid-19 that has pressured the weak healthcare system.
Richard Ajayi, board chairman, Lagos State University Teaching Hospital (LASUTH), told BusinessDay that Nigeria had a huge population of poor people with low purchasing power, facing 77 percent out-of-pocket health expenditure, and a 14 percent government contribution that leaves health infrastructures decrepit and short-staffed, with a pharmaceutical industry unable to breathe without importation of core elements of production.
Due to these challenges, private sector investments are low in the health industry.
Positioning the industry for attraction should mean that investors can tick boxes of five investment forces, which include the number and power of competitive rivals, potential new market entrants, suppliers, customers, and substitutes, according to Ajayi.
“The healthcare ecosystem is not attractive. The barrier to entry is relatively low. Most of the purchases are made out-of-pocket because of the lack of universal coverage. Healthcare from the quality point of view is not protected,” Ajayi said further.
For a fragmented health industry where the National Health Insurance Scheme (NHIS) only covers 4 percent of Nigeria’s 200 million population, roughly 8 million, an assortment of competition between investors in quality healthcare and a general preference of Nigeria’s mostly poor for lower price points either at underequipped public health facilities or traditional herbal alternatives pose serious threats.
The economy is not helping matters, with GDP growth dropping 6 percent in the second quarter of 2020 and unemployment hitting 27 percent within the same period from 23 percent in 2018. The country is now world’s poverty capital with 87 million people eating from hand to mouth.
Kazeem Olatunji, at the early stage of his kidney failure in 2016, patronised a small private convalescence clinic. By the time he was admitted at Gbagada General Hospital in Lagos, his family had lurched from a daily struggle of hand-to-mouth income into a crisis of alms begging. Hardly was about N100,000 raised for his first dialysis session when he was lost to an inadequate system of post-treatment care. Olatunji, in his early 40s, was the breadwinner of his family of five. The trauma of his demise killed his mother a year later.
To treat malaria in Mushin, a suburb of Lagos for instance, it costs about N10,000. Consultation with a doctor is about N1,000. To treat typhoid, another common ailment, it costs about N17,000, depending on the severity. The charges exclude hospital admission which could drive it higher.
The weak health insurance in Nigeria not only increases out-of-pocket burden but also sinks people into poverty. Since 2005, when the NHIS scheme was established by Decree 35 of 1999, a big pool of Nigerians operating in the informal sector remain uncovered, as the focus has been on Federal Government employees, private and community schemes.
The scheme is characterised by inefficiency, lack of cooperation by many organisations and state governments as well as low income earning among Nigerians. Accusing fingers point at major stakeholders, including the NHIS, HMOs and the hospitals, for managing the scheme poorly.
But as deplorable as public health systems are, many poor Nigerians like Olatunji resort to them. In other instances, they simply seek the intervention of traditional medicine practitioners because the high-end health options offered at facilities such as The First Cardiology, The Reddington, The Lagoon Hospital or Eko Hospital, among others, are completely outside their orbit.
The indirect cost of illness in Nigeria has been estimated at $879 billion, doubling more than the country’s GDP, and accounting for about 36 percent (more than one third) of the $2.42 trillion total productivity loss across the WHO African region, a WHO’s report on ‘The indirect cost of illness in Africa’ states.
From the pharmaceutical supply point, the country generally relies on import of most supplies, including equipment that makes already poor Nigerians wretched.
“The CBN intervention is doing some good job, but I think the major issue is that we should move out from being a consumer nation to a nation that produces. We have to embrace the fact that we do not have to rely on others for our own medical needs. We need an in-country synthesis of active pharmaceutical ingredients,” Maurice Iwu, president, Bioresources Development Group (BDG), said at BusinessDay’s Digital Dialogue in June.
COVID-19 has proved that situations can arise and force countries to rely on themselves. India and China shut down borders in the heat of COVID-19 earlier in the year, sending countries scampering for medicines and PPE.
For Abasi Ene-Obong, chief executive of 54GENE, Nigeria needs to demonstrate healthcare as a priority for investments to flow in.
“We keep looking at foreign investments as the saviour for healthcare, but good policy can also increase healthcare financing. It doesn’t have to be only investments, it could be the fact that more people can pay for or that health insurance is rejuvenated in the country and made in a way that people have access to it,” Ene-Obong told BusinessDay.
“When there is financing in the healthcare space, it will fund the healthcare improvement organically. We need to be looking at ways of increasing financing from within as well as ways to attract investment from outside,” Ene-Obong said.
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