Nigeria’s federal budget cycle is a carefully planned process that follows a general structured sequence of — preparation, approval, implementation and evaluation. The budgeting process is critical for allocating resources and enabling service delivery in all sectors of the economy.
The budgeting process typically involves multiple stakeholders throughout the budget cycle, including the Budget Office of the Federation (BOF), the National Assembly, the Ministry of Finance, the National Planning Commission, Ministries, Departments and Agencies (MDAs) and auditing bodies. A well-functioning budget process requires effective coordination, collaboration, and communication among various stakeholders. The Budget Office of the Federation is critical in coordinating and implementing budget and fiscal policies to achieve the government’s goals.
In May 2023, the BOF held a workshop for the Federal Ministry of Health (FMoH) and stakeholders to explore, share and identify strategies to maximise the available resources allocated to the health sector in order to improve Nigeria’s health-related outcomes. The expectations were that involving relevant stakeholders would generate a deeper understanding of fiscal realities and sector priorities, helping to shape the 2023 budget proposals and supporting initiatives such as Universal Health Coverage (UHC) and poverty reduction policies.
The workshop was supported by the World Bank, Bill & Melinda Gates Foundation and The Foreign, Commonwealth & Development Office (FCDO).
Promoting innovative health financing in Nigeria
In his remarks, Mahmuda Mamman, Permanent Secretary, FMoH, emphasised the importance of aligning budgetary allocation with priorities set by the Ministry of Health. Recognising the ministry’s responsibility in establishing and implementing policies that strengthen the national health system, Mamman stressed the importance of coordination between the FMoH and the Federal Ministry of Finance. He underscored the importance of aligning budget releases with implementation timelines, emphasising their critical role in strengthening the sector.
Image credit: Nigeria Health Watch
This reinforces the notion that effective budgetary processes and close collaboration among relevant ministries is essential for the successful implementation of health-related initiatives and for achieving improved healthcare outcomes in Nigeria.
Setting the scene for the workshop, Mr Ben Akabueze, Director General, BOF, highlighted the positive trends in budget allocation to the health sector from various sources, such as the implementation of the Basic Health Care Provision Fund (BHCPF) and commitments to immunisation funding among others. However, he also addressed the challenges faced by the health sector to fully utilise the allocated funds and constraints, such as low government revenue and restricted fiscal space for additional expenditure, and its impact on Nigeria’s out-of-pocket (OOP) health expenditure.
Image credit: Nigeria Health Watch
Discussing the pivotal role of innovative financing mechanisms in securing augmented funding for the health sector, Mr Akabueze highlighted several existing mechanisms, including the proposal to increase the BHCPF to 2% of the Consolidated Revenue Fund (CRF). He emphasised the importance of sustaining and expanding commitments for counterpart funding to procure vaccines through the Global Alliance for Vaccines and Immunization (GAVI). These policies are intended to increase the financial resources available to the health sector and to the improvement of health services in the country.
Mr Akabueze further stressed the importance of improving access to innovative global funds by improving the fiscal performance of the health sector and ensuring optimal utilisation of resources. He highlighted the importance of achieving value for money in health investments and underscored the critical need for close collaboration and effective information sharing among key stakeholders. Specifically, he emphasised the importance of fostering strong partnerships and coordination between the Ministry of Finance, Budget, and National Planning and donors. This collaborative approach will help leverage additional resources, enhance transparency, and maximise the impact of health sector interventions in Nigeria.
Priorities for human capital development in Nigeria — The health sector in the National Development Plan (NDP)
Speaking on the implemention of the National Development Plan (2021–2025), Dr Sarah Alade, the Special Adviser to the President on Finance and Economy, emphasised the critical need for Nigeria to prioritise human capital development. She discussed the need for a comprehensive approach to human capital development, recognising its enormous potential for healthy economic growth, capitalising on Nigeria’s demographic advantage, alleviating poverty, and ensuring social stability. Countries can unlock their full potential and create a prosperous and inclusive society by investing in people and providing them with opportunities to acquire knowledge, skills, and good health.
While highlighting strategies and policies for prioritising human capital development, Dr Sarah Alade emphasised the importance of strengthening Nigeria’s health system service delivery capacity to significantly improve quality and access through effective healthcare workforce management, as well as securing healthcare financing to upgrade health facilities and fund expanded access to health services in Nigeria.
Image credit: Nigeria Health Watch
Reiterating the need for innovative financing options to implement the National Development Plan effectively, she stated, “An estimated 1.65 trillion in public sector investments is required to fund the health sector in the 2021–2025 plan. The Federal Government has taken steps to catalyse investments in healthcare infrastructure through the Nigeria Sovereign Investment Authority, PPPs, and other innovative sources. These include a Health Infrastructure Tax-Credit Scheme, Social Impact Bonds, leveraging pension funds and institutional investors, expanding health insurance coverage, crowdfunding, and seeking philanthropic support and endowments.”
Key takeaways and recommendations
- Innovative financing mechanisms, such as Public-Private Partnerships (PPP), are essential for the health sector. Exploring new ways to finance healthcare can help to address funding challenges.
- Effective resource management requires tracking and mapping. Activities such as resource mapping and expenditure tracking help in assessing investments in the health sector.
- Efforts should be directed towards addressing the revenue challenge and improving the revenue-to-GDP ratio. The Strategic Revenue Growth Initiative (SRGI) and other measures aim to enhance government revenue while achieving better value for money. The rationalisation of administrative expenses, including the BHCPF, is necessary to optimise budgetary resources.
- Increasing the capacity of universities to absorb more medical students and ancillary services is necessary to train more doctors and nurses. Nigeria’s demographic advantage can be leveraged to meet the growing demand for healthcare professionals globally.
- Transparency and accountability in resource utilisation are essential. Increasing public sector capability for impact and sustainability reporting can help build trust and attract partners to support health goals.
- Continuous monitoring and evaluation is essential for holding healthcare providers and policymakers accountable.
- Collaboration and partnership among stakeholders is crucial. A well-defined communications and stakeholder strategy can effectively communicate results and foster learning.
- The efficiency and effectiveness of innovative financing mechanisms should be demonstrated to enable access. Assessing impact, technical feasibility, stakeholder support, fundraising potential, and cost is essential for selecting the most suitable mechanisms.
- Improved record-keeping, expenditure tracking, and audit processes is needed to ensure transparency and accountability. Results should be documented and published professionally and transparently.
- Evaluation of the adopted mechanisms regarding impact, added value, effectiveness, ownership, predictability, and pro-poor focus is critical. Regular appraisals during implementation can help sustain impact and enhance results.
A seamless budget implementation process is critical in the health sector, as it directly impacts people’s lives. Addressing the identified issues and strengthening the budget formulation, execution, and evaluation processes will improve the sector’s financial management, transparency, and accountability. Ultimately, these efforts will help ensure that resources are effectively allocated and utilised, leading to better health outcomes for Nigerians.