Nigeria’s ballooning debt, juxtaposed against the stagnant growth in education and health sectors, paints a stark picture of fiscal disparity. Since 2015, the nation’s budgeted debt service cost has skyrocketed to N33.7 trillion, dwarfing the N16.5 trillion allocated to crucial areas like education and health.
These figures, sourced from the Budget Office of the Federation and BudgIT, starkly contrast with the period from 2012 to 2014, when N2.14 trillion was earmarked for education and health, surpassing the N1.86 trillion for debt service.
Read also: Nigeria’s debt service bill surges to six times budget for health, education in 2024 budget
Currently, the debt-to-GDP ratio hovers at 37 percent from 23.27 in 2022, according to the International Monetary Fund (IMF), with public debt escalating to N87.91 trillion from N41.6 trillion two years ago.
Chronic underfunding in health and education
Despite soaring debts, investments in essential sectors such as health and education are grossly insufficient. The 2024 budget allocates merely N1.33 trillion, or 5 percent of the total budget, to health. This includes N1.07 trillion for the Federal Ministry of Health and related agencies, N137.21 billion for immunization initiatives, and N125.74 billion for the Basic Healthcare Provision Fund. Compared to the N724.9 billion allocated in 2022, it’s evident that underfunding has been a persistent issue.
The education sector is similarly under-resourced. In 2015, the per capita education expenditure was a meager N6,056, increasing to N9,618 in 2024. The 2024 budget allocates only N2.18 trillion (7.9%) to this sector, highlighting President Bola Ahmed Tinubu’s administration’s insufficient focus on education.
Analysis of the ‘Renewed Hope’ budget reveals that N1.23 trillion for the Federal Ministry of Education, N251.47 billion for the Universal Basic Education Commission, and N700.0 billion for tertiary education infrastructure.
In stark contrast, the government plans to spend N8.25 trillion on debt servicing in the 2024 budget, a figure six times higher than the combined budget for health and education.
The cost of misallocation
Nigeria’s debt trajectory has been alarming. From 1999 to 2021, Federal Government borrowings surged by 658 percent, with a notable increase during the Buhari administration. The total public debt further escalated to N87.38 trillion in 2022. This misallocation of borrowed funds, earmarking a hefty 30 percent for debt servicing in the 2024 budget, overlooks crucial social development sectors.
The dire health and educational landscape
The health sector struggles with escalating drug prices and insufficient funding. A report by SB Morgen Intelligence highlights dramatic increases in medicine costs between 2019 and 2023. For instance, the price of Ampiclox soared by over 1,000 percent. This steep rise in medical costs significantly impacts the population, with 19 percent of survey respondents spending a substantial part of their income on healthcare.
Education faces similar challenges. With 1 in 3 Nigerian children out of school, the situation is alarming. In Kaduna alone, there are 680,000 out-of-school children. This dire state underscores the need for urgent attention to education, pivotal for peace and social stability.
Comparative perspective: Nigeria versus South Africa
While both countries face unique challenges such as unemployment, inflation, and a high number of persons living with HIV, their budgetary priorities and outcomes present a revealing contrast.
South Africa demonstrates a stronger commitment to health and education. Despite budget cuts, South Africa allocated R60.1 billion to health in 2023/24 and has seen a significant increase in medical training and education spending.
In South Africa, the 2023/24 health budget stands at R60.1 billion, even after a reduction from the previous year. This allocation reflects the government’s sustained focus on health, despite discontinuing COVID-19 specific funds and contending with budget cuts in other areas. In comparison, Nigeria’s allocation to health in its 2024 budget is a mere N1.33 trillion, representing only 5 percent of its total budget. This disparity highlights the contrasting priorities of the two nations in addressing healthcare needs.
Furthermore, South Africa’s investment in medical education and training is note-worthy.
From 2015 to 2022, the number of medical interns increased from 500 to 2,625, supplemented by graduates from Cuban medical programmes. The number of medical conserves also rose significantly, from 1,322 to 2,369. To support this growth, the South African government allocated R7.8 billion over the Medium-Term Expenditure Framework for interns and conserves, with an additional R8.7 billion earmarked for specialist training over three years.
In the realm of education, South Africa’s commitment is equally robust. According to data from macrotrends, the nation’s education spending stood at 19.75% in 2022, up from 18.42% in 2021. The government planned to spend R246 billion, or 16.7% of its total resources, on basic education programs in 2018/19. Overall, South Africa dedicates more than 20 percent of its resources to basic and higher education, with its combined education spending surpassing 6 percent of GDP.
Contrastingly, Nigeria’s investment in education remains inadequate. In 2024, the education sector received only N2.18 trillion, accounting for 7.9% of the total budget. This figure is a stark contrast from South Africa’s proactive investment in education, indicating a significant gap in prioritisation and resource allocation.
This comparative analysis underscores the missed opportunities and the need for strategic fiscal management in Nigeria, especially in leveraging resources for the advancement of health and education sectors, which are critical for the nation’s sustainable development and future prosperity.
The imperative for strategic investment
Nigeria must prioritise health and education to reverse these trends. This requires not just increased budget allocations but effective utilization for capital projects and engaging the private sector.
A call to action
Realigning Nigeria’s fiscal priorities towards health and education is crucial for the nation’s long-term stability and prosperity. It’s essential for the government to recalibrate its strategy, focusing on the well-being and education of its citizens, which are fundamental for sustainable development and economic growth.
