A report by the Nigeria Governors’ Forum on health sector expenditures has revealed that between 2021 and 2023, Nigeria’s 36 states allocated just 1.22% of their health budgets to medical appliances and equipment.
The findings, obtained on Sunday, showed that 61.83% of aggregate health budgets during the period were dedicated to public health services and health administration, leaving minimal allocations for hospital services (26.17%), outpatient services (10.5%), medical equipment (1.22%), and health research (0.28%).
Rising Expenditures, Low Performance
In 2022, total health expenditure by the states reached ₦505 billion, representing 7% of total state 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, with an average budget performance of 63% year-on-year, actual spending for 2023 is expected to fall significantly short of the target.
On average, states spend ₦14 billion annually on healthcare, but spending patterns vary widely. Notably, only 15 states had a Medium-Term Health Sector Strategy (MTSS) guiding their 2024 budgets. Other states rely on alternative internal planning frameworks within health ministries, which sometimes align with MTSS principles.
Capital vs. Recurrent Spending
The report highlighted a 33:67 ratio of capital to recurrent spending in the health sector, reflecting a greater focus on healthcare administration rather than infrastructure or equipment. Some states, however, bucked the trend. Ebonyi led with 85% of its health spending on capital projects, followed by Rivers (72%), Kaduna (63%), Delta (59%), Sokoto (58%), and Jigawa (55%).
Instances of miscoding, such as classifying drugs and personal protective equipment (PPE) as capital expenditures, were also noted, further complicating the accuracy of budget reporting.
External Funding and Financing Challenges
The report underscored the reliance of state governments on external sources for 16% of health budgets, including grants, aid, and loans. While international aid remains the dominant source of non-discretionary funding, less than a quarter of states utilize loans to finance capital health projects. This low uptake is attributed to difficulties in securing loans or a lack of interest in pursuing such financing options.
Future Recommendations
To address gaps in health expenditure reporting, the report recommended full implementation of the National Chart of Accounts (NCOA) program segment, which would enable better classification of health spending across services and disease categories.
The findings also emphasized the need for improved budget performance, strategic capital investment, and diversification of funding sources to strengthen healthcare delivery across Nigeria’s states.