By David Arome
For two decades, Nigeria’s health sector has grappled with persistent funding shortfalls that continue to weaken its ability to deliver optimal care.
Despite health being regarded as one of the most crucial sectors, underfunding and inefficient budget implementation undermine service delivery. It is a heartbreaking reality that Nigeria’s health budget still lags at 4 – 6%, falling short of the 15% recommended target of the Abuja Declaration of April 20, 2001. Trend analysis in 20 years (2001-2021) of budgetary allocation to the health sector stands at an average of 5.05%, with a shortfall of 9.95%.
Recently, Professor Ali Pete, the coordinating minister of health and social welfare, gave a vivid account during the 2026 budget defence that only N36 million (representing 0.1%) of the N218 billion budgeted was released for capital projects in 2025. This severely hinders health infrastructure development and project implementation.
Nigeria continues to depend heavily on individual payments for healthcare, with out-of-pocket spending exceeding 70 per cent of total health expenditures. This approach disproportionately burdens low-income households and contributes to catastrophic health spending.
Another glaring challenge is over-reliance on external funding and donations. Most of the interventions and programmes in Nigeria are largely funded by international organisations such as USAID, UNICEF, the World Bank, and the Gates Foundation. The end of the funding cycle signifies the end of the programme or intervention. A classic example is the closure of the USAID-funded programme by the United States government.
In addressing health financial gaps, there is an urgent need to strengthen domestic resource mobilisation, reduce leakages, and increase allocation to the health sector, aligning with the Abuja declaration. Extend partnerships with the private sector to catalyse investment in the health infrastructures, improving access and efficient service delivery.
Also, expanding the health insurance coverage in the formal and informal sectors, ensuring that more Nigerians have protection against financial pressure from out-of-pocket spending. Furthermore, incorporate technology-driven revenue management for budget planning and tracking of expenditure to reduce wastage and strengthen accountability and public trust.
It takes strong political will and institutional reform to close the health and financial gaps. Strengthening health financing is not just an economic imperative; it is foundational to achieving a healthier, more productive nation.
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