Politics and Healthcare Finance in Nigeria

Abstract

Nigeria, as Africa’s most populous nation, continues to experience a profound health financing crisis manifested by extremely high out-of-pocket expenditure (76–79% of total health expenditure; third highest in the world), chronic under-investment (4–5% of the national budget vs. The Abuja Declaration target of 15%), and severely fragmented risk pooling (covering <10% of the population). This study investigated the political economy of healthcare financing in Nigeria, focusing on how political institutions, stakeholders’ vested interests, and governance structures shape Financing Outcomes and health inequalities. Using a sequential explanatory mixed methods approach, the study examined both quantitative health Financing and outcome indicators across Nigeria’s 36 states and 774 Local Government Areas (2019–2024), traced the political process through which the National Health Insurance Act (NHIA) of 2022 was enacted, documented the unfolding of the 2025 National Health Financing Dialogue and conducted a systematic literature review. Results show that political executives wield considerable influence over Financing Decisions in Nigeria, (average scores: Executive 4.72 out of 5; citizen 1.86 out of 5; P <0.001) translating into regressive allocation favoring the wealthy populations (Concentration Index = 0.367; P <0.001). Gross geographic inequities persist, evidenced by up to 2.3-fold higher under-5 mortality rate in North-East states (148 per 1,000 live births) compared to South-West states (65 per 1,000). State budget transparency (= 0.238; P = 0.002), accountability quality (= 0.184; P = 0.024), health workforce density (= 0.412; P <0.001) and not debt service costs (= -0.142; P=0.021) significantly predicts state health expenditures. The impending 2025 Dialogue, may signify a potential rebalancing of the political forces and realignment as the initiative brings together several cross-sectoral stakeholders. The protracted crisis is fundamentally a political not technical one. Universal health coverage (UHC) requires complementary progress on enhancing domestic revenue mobilization, expanding risk pooling, improving allocative efficiency through, for instance, health technology assessment, building better accountability and citizen engagement. It will need a combined legislative- executive approach which should however, also include robust co-ordination between federal and states in Nigeria, and unwavering commitment from its political leaders.