A report from the Nigeria Governors’ Forum on health sector expenditure and institutional review has revealed that 36 states rely on external funding for 16% of their health budgets.
The report, obtained on Monday, highlighted that external sources such as aid, grants, and loans contribute significantly to state health budgets.”
Grants and international aid programmes serve as the primary sources of non-discretionary capital funding for most states, with fewer than a quarter exploring loan options to finance capital projects in the sector,” the report stated.
The low adoption of loans was attributed to challenges in securing them or a lack of interest in pursuing such financing options.
In 2022, total health expenditure by the 36 states amounted to ₦505 billion, representing 7% of their total spending, up from ₦484 billion in 2021.
For 2023, the states collectively budgeted ₦923.31 billion for the health sector, an 83% increase from the actual expenditure in 2022.
However, the report noted that budget performance for the sector averages 63% annually, suggesting that actual spending in 2023 may fall short of the ₦923.31 billion target.
On average, state governments allocate ₦14 billion annually to health, though there are significant disparities among states.
The report also pointed out that only 15 states have a Medium-Term Health Sector Strategy (MTSS) aligned with at least the 2024 budget year. It noted that some health ministries rely on alternative planning documents and internal frameworks to guide resource allocation within the sector.
Some of these alternative tools, the report said provide a prescription of the activities, outputs, and outcomes similar to what is attainable in the MTSS, although driven at the health ministry level.
In terms of healthcare prioritisation, the report said 61.83% of the aggregate health budget of the 36 states from 2021-2023 was allocated to public health services and health administration, leaving 38.17% for hospital services (26.17%), outpatient services (10.5%), medical products appliances and equipment (1.22%), and health research and development (0.28%).
“States’ inability to present their health expenditure by specific services (e.g. primary care, secondary and tertiary healthcare programmes) and disease categories (e.g., infectious diseases, non-communicable diseases, maternal and child health) is because the National Chart of Accounts (NCOA) was developed based on the global standard Classification of Functions of Government (COFOG) which did not provide these classifications of health spending. Full implementation of the programme segment of the NCOA will help rectify this issue in future years,” the report added.