Reimagining the Future of Health Financing in Nigeria

Executive Summary

Health financing in Nigeria is undergoing a structural reset, driven by rising fiscal pressure, declining donor support, and the urgent need to reduce out-of-pocket spending. As of 2025, over 70% of total health expenditure in Nigeria is financed directly by households, exposing millions to financial risk and limiting access to essential services.

Recent reforms signal a shift toward a more sustainable financing model. The National Health Insurance Authority (NHIA) Act 2022 is now being enforced nationwide, with a presidential directive mandating insurance coverage across public and private sectors. This is expected to accelerate coverage beyond the current 20 million enrollees, with a national target of 44 million by 2030.

Public financing mechanisms are also expanding. The Basic Health Care Provision Fund (BHCPF) has disbursed ₦194 billion to over 8,300 facilities, reaching approximately 2.6 million Nigerians. However, per capita primary healthcare spending remains low at roughly $7, well below the $30 benchmark required for adequate service delivery.

To close these gaps, Nigeria is prioritizing domestic resource mobilization, including new health taxes on tobacco, alcohol, and sugary drinks. These reforms align with broader continental shifts toward public financial management in health financing and reduced reliance on external aid.

Ultimately, the trajectory of health financing in Nigeria will depend on implementation. Translating policy commitments into measurable improvements in coverage, efficiency, and financial protection is now the defining challenge.

Key Takeaways

• High Out-of-Pocket Burden: Over 70% of health spending is financed by households, making Nigeria one of the most out-of-pocket-dependent systems globally.
• Insurance Expansion: More than 20 million Nigerians are currently enrolled in health insurance, with a national target of 44 million by 2030 under NHIA reforms.
• Public Financing Growth: The BHCPF has allocated ₦194 billion to primary healthcare, but funding levels remain insufficient relative to population needs.
• Subnational Role: State governments and State Social Health Insurance Agencies are central to scaling coverage but face gaps in enforcement and financing.
• Domestic Resource Mobilization: Health taxes and fiscal reforms are emerging as critical tools to reduce dependence on donor funding and expand fiscal space.
• Private Sector Participation: Investment in manufacturing, insurance, and public-private partnerships is key to unlocking additional financing capacity.
• System Accountability: Strengthening transparency, data systems, and performance tracking is essential to ensure efficient use of resources.