The Centre for Social Justice (CSJ) has put forward a proposal for the establishment of a Health Development Bank in a move towards strengthening Nigeria’s healthcare system.
The announcement was made by the Lead Director of CSJ, Eze Onyekpere, during a workshop on “Innovative and Alternative Funding of the Health Sector” held in Abuja on Wednesday.
The current state of healthcare financing in Nigeria has been a cause for concern, with allocations to the health sector averaging a mere 5% of the federal budget over the last five years (2018-2022). These allocations encompass capital, recurrent, statutory transfers, and other vital aspects of the health sector, but still fall far short of meeting the sector’s demands.
According to Onyekpere, the CSJ’s proposal for a Health Development Bank seeks to address the financial constraints faced by the health sector, he noted that: “If implemented, the bank will provide a predictable and sustainable source of funding for critical health projects, ensuring that funds are tied to specific results and milestones in line with national health policies and goals.”
Currently, a significant portion of Nigeria’s health budget is dedicated to recurrent expenditure, leaving minimal room for capital investments in health infrastructure and upgrades. Onyekpere said “The proposed Health Development Bank would enable targeted investments in areas such as health facilities, medical equipment, digital technology for telemedicine, and improvements in pharmaceutical production, including the manufacture of critical vaccines and pharmaceutical ingredients.”
One of the pressing challenges in the health sector is the lack of access to basic medical equipment in primary healthcare facilities. According to the World Health Organization (WHO), only 41% of such facilities had access to such equipment in 2018. Additionally, many health facilities suffer from inadequate access to electricity, water, and sanitation, affecting the quality of healthcare services provided.
The Health Development Bank aims to address these issues by supporting infrastructure provision and upgrades in health facilities, fostering an enabling environment for quality healthcare delivery. This, in turn, will reduce the need for medical tourism, saving the country over $1 billion annually.
Onyekpere said: “The bank will be instrumental in improving Nigeria’s pharmaceutical industry, which currently heavily relies on imports. By providing funds for infrastructure, technology, and human resource development, the bank can stimulate local production of critical pharmaceuticals and vaccines, enhancing the nation’s health security.”
The proposal also emphasizes the need to invest in the health workforce to bridge the significant gaps in healthcare personnel. Nigeria’s doctor-to-patient ratio is far below the desired levels, and the country needs an additional 149,700 doctors to achieve the ideal 1 doctor to 1000 patients ratio. The Health Development Bank would develop a human resource loan scheme to facilitate the training and development of essential healthcare professionals.
If approved and implemented, the Health Development Bank has the potential to transform Nigeria’s healthcare landscape, increasing access to quality healthcare, generating jobs, improving tax revenue, and enhancing the nation’s GDP contribution.
The proposal is set to be submitted to the National Assembly for consideration, and stakeholders in the health sector are eagerly awaiting the outcome. Experts believe that the establishment of a Health Development Bank could be the much-needed boost that Nigeria’s health sector requires to reach its full potential and deliver world-class healthcare services to its citizens.
Earlier, CSJ’s Programme Manager, Public Finance, Dr Chidi Sundayson, during a paper presentation on “Sugar & Sweetened Beverage (SSB) tax as Alternative Source of Healthcare Funding,” estimated that an SSB tax in Nigeria has the potential to generate approximately 1% of the country’s GDP, equivalent to USD 4.77 billion. This revenue could significantly contribute to funding the health sector and strengthening healthcare and health systems in the nation.
Sundayson said “In light of Nigeria’s current revenue challenges and mounting debt burden, adopting the SSB tax as an alternative funding source is a critical consideration. By ploughing back the resources generated from the tax into the health sector, transparency and accountability can be ensured through well-designed systems for tax collection and administration.”
He added that SSB tax offers a promising opportunity to bridge the funding gap and improve healthcare for all Nigerians. With the Sustainable Development Goals still seven years away, decisive action is required to make significant strides towards better health outcomes.