States fail to raise health spending despite N6.6trn revenue

About 34 states failed to raise their health expenditure in 2022 despite generating a cumulative revenue of N6.6 trillion, data from Budgit’s report on the State of States shows.

Budgit is a civic organisation that tracks budgetary allocations and implementation, providing insights into how money is spent.

The report shows that the cumulative revenue of the 36 states grew by 28.95 percent from N5.12 trillion in 2021 to N6.6 trillion in 2022.

But only two states, Sokoto and Jigawa, spent more than 15 percent of their total expenditure to improve healthcare, in line with the Abuja Declaration recommending that at least 15 percent of government spending should focus on health.

While 24 states spent below the national average of N4,499 in 2022 per capita, Anambra, Abia, and six other states are identified as the worst spenders, offering below N1,000 per capita on health.

Interestingly, not only did 9 states exceed the UNESCO recommendation of allocating 20 percent of the annual budget and spending to education, 15 percent of the total expenditure for 17 states went to education.

In August during his screening, Muhammad Ali Pate, the coordinating minister for Health and Social Welfare Nigeria hinged the potential to improve healthcare on prioritising financing.

Without robust domestic funding of healthcare, Pate said the gaps in the health sector cannot be bridged and will imply that the government is inadvertently outsourcing funding to international donors.

He said only the federal government must act, states must also appropriate these resources to safeguard the financing of essential things like vaccines.

The out-of-pocket health spending in Nigeria ($54) grossly outstrips the total government expenditure on health ($12) which amounts to an inconsequential share of the country’s gross domestic product, Pate added.

“Most of the spending on healthcare is from families and the government puts $12 to $14 per person which is roughly one percent of the GDP. Niger, our next-door neighbour that has fewer resources allocates more than double what we allocate in terms of health spending related to their GDP,” Pate said.

“That’s an indication of prioritization. Ghana similarly, does that. The point is that domestic financing represents the prioritization given to health. But we are not spending enough, perhaps because the revenue is limited but even within the limited revenue, there’s room to increase the financing for health.”

According to Budgit, the internally generated revenue (IGR) of the 36 states appreciated by 12.98 percent from N1.61 trillion in 2021 to N1.82 trillion in 2022, marking a strengthened domestic revenue mobilisation capability.

However, the IGR to GDP ratio remained very low at 1.01 percent. The increase in IGR did not reflect across board as 17 states experienced a decline in their IGR from the previous year while 19 states recorded positive growth, occasioned by a 49.2 percent increase in global oil prices, gross federal transfers rose by 35.68 percent from the previous year to N4.05 trillion.

The total expenditure of the 36 states put together stood at N8.2 trillion, 24.7 percent more than the N6.58tn spent in 2021.

Except three states, Anambra, Cross River, and Rivers, 33 states had an increase in their total spending in the 2022 fiscal year.

But due to the huge deficits in infrastructure, primary healthcare, education, and ease of doing business indicators, several states are focusing their resources on improving infrastructure security, accessibility to information, reforms in regulation, and education, leaving health at the tail end.