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Funding healthcare in an economic recession

By Emejuiwe Victor   |   09 October 2016   |   4:10 am



Funding health care in an economic recession is something that cannot be ignored. This is so because health care is a major service that affects the entire wellbeing of the citizens irrespective of their, age, gender, social class and economic status. No matter how gloomy the economy is efforts must be consciously made to source for funds to cater for services such as health care. Understandably Nigeria is in its very bad shape economically, with the GDP dropping in two consecutive quarters. The negative state of Nigeria’s economy has affected public funding of so many projects and services budgeted for in the year 2016.

The Federal Government budgeted the total sum of N6trn in 2016 out of which N250bn was allocated to the Federal ministry of health. This represent a total allocation of 4% of the total budget; the capital budget allocation to the health care was N28bn out of a total capital budget of 1.6trn. Assuming the figures allocated to the health sector is fully utilized, it is still very minimal compared to the funding requirement needed in the sector.

For the component of maternal new- born child health alone, a USAID- delivered project has estimated a funding requirement of N350bn annually to provide services for maternal newborn child health. Also, if the federal government had adhered to the agreement it reached with African leaders in Abuja to set aside 15% of total national budget for health, the 2016 budgetary allocation to health should be N659bn. Despite the funding gap to the health sector, there is uncertainty that the allocation for the sector will be fully utilized in the 2016 budget due to the economic recession.

The federal government has declared that not all projects budgeted for in 2016 will be funded and that projects will be funded on priority basis. So far, in the fourth quarter of 2016, just N350bn of the capital budget has been released to all sectors from a total capital budget of 1.6trn. This indicates that the disbursement to health will experience a deep slice from its budgetary allocation. The danger of this is that, the health indicators of Nigerians will be greatly affected. This danger will be largely felt by the vulnerable such as mothers and children. This group of people benefits from subsidized health services in the provisions of vaccines and immunization for neo-natals. Free drugs and basic health care provisions in the Primary Health Care Services are largely accessed by majority of Nigerians who utilize government hospitals. They are bound to be largely affected if the health budget is not properly funded and implemented.

To avoid the jeopardy of high mortality and morbidity rate in Nigeria, there is an urgent need to explore alternative sources of funding health in this period of economic recession. Some of the several ways include; the utilization of community-based health insurance. The CBHI requires contribution of token by members of a community within an average amount of not more than double digit of the naira value i.e. such as between N100 to 500 monthly or as the case may be quarterly or annually. This amount is to be contributed by every adult in the community and to be accessed whenever they fall sick. With the help of the NHIS, the funds can be managed by the local primary health care centers.

Other source of raising funds are through crowd funding. In crowd funding, the NPHCDA in collaboration with the Ministry of Health can set up a crowd funding in its website where a dedicated account is set up for free will donation for the support of health care services. In this case it is recommended that Maternal and newborn Child Health be strictly considered for this as a result of the huge demand of fund needed to curb the maternal and neo-natal mortality in Nigeria. In crowd funding people from within and outside Nigeria can donate as little as $1 or more to help fund health.

Another suggestion is by introducing “Sin Tax. This term is used to refer to taxation demanded from companies who violate health regulations either by importing or production of harmful health commodities, such as tobacco, alcohol, etc, or by violating health and environmental rules in the conduct of business. The derived tax is channeled back to the health sector. Other forms of taxation, which can be used to fund health are voluntary sales tax. This is the introduction of an additional cost on a dedicated item labeled for health support; it is different from other homogenous item in the same category. By implication, whoever buys the labeled ones is voluntarily supporting health care and the additional cost is channeled back to the Ministry of Health by the company.

In addition, companies should direct their corporate social responsibility to health care services. They should help fund primary health care services and be well recognized by the Federal Government. There is need for investment in the production of vaccines made in Nigeria. The private sector should collaborate with government to fund this research and also go into the production of vaccines. This will reduce the burden of sourcing foreign exchange for the importation of vaccines from abroad.

A contingency fund that will attract free will and public donation should be set up for health care. The Federal Government should engage stakeholders in the health sector regularly so as to device more innovative means of funding health. Alternative funding for health care is supported by various health policies, such as the Conference for Maternal health care Financing and the National Health Development Strategic Policy 2010-2015.

In conclusion, while mechanisms are put in place for this various innovative sources to be explored, the 2016 health budget should form part of the major funding priority of the Federal Government. Not funding and implementing the health budget will be a major developmental setback for Nigeria.
• Emejuiwe Victor is of Centre for Social Justice Abuja.

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economic recession

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