Adeyi: Govt Should Ensure Efficient Use of BHCPF, Improve Health Financing

Dr. Olusoji Adeyi

Dr. Olusoji Adeyi is the Director of Health, Nutrition and Population Global Practice at the World Bank Group. In this exclusive interview with Funke Olaode, Shola Oyeyipo and Martins Ifijeh at the recently concluded IMF/World Bank Spring Meeting in Washington DC, he shared models on how best to address healthcare issues in Nigeria, need for improved funding, the ongoing BHCPF implementation and other sundry issues. Excerpts: 

What is your take on the level of implementation of the BHCPF by the federal government?

The 2018 Federal Budget included, for the first time, an allocation for the Basic Health Care Provision Fund (BHCPF). The Federal Government is taking the lead with support from some of the development partners who are also investing in health in Nigeria.  My current understanding is that they are now working very seriously to operationalise it by ensuring that the implementation mechanisms and operational manual are in place. So, there is progress. It could move faster, but there is progress.

The one per cent equity fund allocated by the federal government for BHCPF in 2018 is still being implemented half way. If we don’t expend funds for 2018, don’t you think it will affect release of the 2019 BHCPF by the government and by extension discourage development partners from releasing funds for 2019?

That is a decision to be made by the Federal Government and by the National Assembly. One of the things to consider, I understand, is that the BHCPF started as a Service-Wide Vote, under which unspent funds would be returned to the treasury at the end of each year.  That reduces predictability. If it were instead designated and implemented as a Statutory Vote, the BHCPF would be able to roll over unspent funds from year to year, which means that any unspent fund will not be returned to the treasury after the fiscal year.  There would be l be greater confidence in the system both by the public and the managers of the fund.

Last year there were many conversations on improving healthcare in Nigeria, and part of it was the BHCPF and implementation of the health act, yet in the 2019 budget, health allocation is still small. How can government improve on this?

There are several factors to keep in mind, especially the fact that the Nigerian government spends less on health than almost any other country in the world. In 2018 for instance, I think it was 4.5 per cent of the federal budget that was allocated to healthcare. The total government expenditure for health in 2015 was 0.6 per cent of Gross Domestic Product (GDP) and as a share of total government expenditure, government health spending is also low. Health expenditure in Nigeria is dominated by private out-of-pocket (OOP) expenditures at about 75 per cent of total health expenditure; that is one of the highest in the world. Consequently, about a quarter of all households in Nigeria spend 10 per cent or more of their total household expenditure on health, a situation that is described as catastrophic health expenditure.

This causes a lot of stress for households, and of course out of pocket expenses can push people into poverty, or in fact they may forgo healthcare all together. The need is for two concurrent things to happen and it is important they are taken concurrently because they are not mutually exclusive:

First, the government should ensure the efficient use of the funds that are already being allocated. That is where performance-based funding is important, with better public financial management. With this you can actually see the way the money allocated is being used, while increasing transparency and accountability.

Second, there should be increased allocation to the health sector at all levels in the federal, state and local governments. Such increase could come from increased budgetary allocation and of course in a very careful way, government could also look at equitable and efficient ways of putting in place mandatory social health insurance.

Mandatory Health Insurance is very different from Voluntary Health Insurance, and I note that the global evidence does not support Voluntary Health Insurance as a pathway to Universal Health Coverage in a country like Nigeria with millions of people in the informal sector and tens of millions of people living in poverty. In 2012, only about five countries have generated more than 20 percent of their total expenditures from Voluntary Health Insurance. Therefore, I am not at all suggesting voluntary health insurance because when you look at the global evidence, the best way for Nigeria to improve financing in the health sector is to improve public spending in terms of adequacy, efficiency, and equity.

However, if the governments were to expand insurance, it should be noted that while those in the formal sector will be able to make contributions via the pay roll, there are millions of people in the informal sector in the country, and there are millions of people who are poor and vulnerable as well, who would not be able to afford the premium, and would therefore  need support through subsidy from the general budget. In short, governments would pay all or most of the premium on behalf of such people.

This underlines the point I already made that the most efficient way to do this thing is via the public budget. Health insurance is very useful and is part of the overall health financing framework, but health insurance by itself is not an escape route to avoid spending more public budget on health.


Nigeria has over 11 million stunted children in the country. How do we address human capital development if our children are stunted?

The point of improving human capital is that a viable economy for the country depends on a sound, healthy and educated workforce, and if you continue to have a situation whereby there is a high prevalence of stunting in the country, it affects the capacity of the children to learn, and when that capacity is impaired, it means the workforce of the future in the country will not perform at full capacity. Global and regional experience suggest that it takes a multi-sectoral approach that includes the health sector, agricultural sector, water and sanitation sector, social protection, and education sector, just to name a few.

We need to work across sectors to deliver interventions that are nutrition-specific and nutrition-sensitive as part of plans to tackle the problem of malnutrition in the country.

With regards to human capital more broadly, that goes concurrently to access and quality of health services. It also goes with improving access to, and the quality of education.

It is not enough to just go to school; the quality of the education has to be of high standard so that people actually learn. We should be putting a lot of emphasis on what the children are learning. When you have healthy children, who have access to high quality education, then you are building human capital for the children. This will contribute towards broad and durable economic growth which will then help to reduce the prevalence of poverty in the country.