World Bank: Nigeria Underfunds Health And Education

According to the World Bank’s latest report, “Human Capital Public Expenditure and Institutional Review”, Nigeria’s investment in education and healthcare is alarmingly insufficient.

The report examines the financial and governance challenges hindering the provision of basic education and primary healthcare in the country.

As of Wednesday, the report revealed that public spending accounts for a mere 12% of Nigeria’s Gross Domestic Product, falling significantly short of the necessary threshold to fund essential public services, highlighting a critical need for increased investment in these vital sectors.

The report highlighted, “This compares to the Sub-Saharan African average of 17.2 per cent and the lower middle-income countries average of 18.5 per cent. Over the past five years, Nigeria’s health and education expenditure has fluctuated between 10 and 12 per cent of GDP.

“When measured against international standards, it becomes evident that this level of investment is insufficient for delivering adequate essential public services. As a result, a large proportion of spending, especially health spending, is out of pocket, which excludes a significant segment of society from accessing health services.

“At $23 and $15 per capita, public expenditure on education and health in  Nigeria, respectively is inadequate by any standard. Of the $23 per capita spending on education, states spend $14 and the remainder is spent by the Federal Government. Similarly, of the $15 per capita spending on health, states spend $8.5 This level of spending compares poorly to Nigeria’s peers. It is far more inadequate given the need to tackle significant issues such as the high rates of out-of-school children and child mortality.”

The World Bank attributes the inadequate spending on health and education to the limited overall public spending, which is hindered by meager revenue.

In 2021, education and health allocations accounted for a mere 10.1% and 6.6%, respectively, of the combined federal and state budgets, indicating a constrained investment in these vital sectors.

“The two largest shares of the budget were spending for General Public Services (24.2 per cent) and Economic Affairs (18.4 per cent). Debt charges within General Public  Services were the third largest expenditure item at 17.6 per cent of the general government (federal and state) budget. Social sectors—education, health, and social protection—received together less than one-quarter of the national budget in 2021.

“The states spend more than the FG on both primary health and basic education. In absolute terms, states spent N1,299 billion on education and N731  billion on health, compared to federal spending of N773 billion and N610 billion, respectively. Thus, education constituted the third-highest spending for state governments, followed by spending on health,” it noted.

The report suggests that in the medium to long term, improving state budget execution rates and increasing federal and state allocations are crucial to ensure adequate funding for health and education services.

Professor Tanimola Akande, a public health expert, commented that Nigeria falls short of the World Health Organization’s and the Abuja declaration’s recommended benchmarks for health funding, resulting in poor health outcomes and indices, emphasizing that insufficient public health spending is a significant contributor to these issues.

“Most African countries are even better than Nigeria in terms of the proportion of national budget that is allocated to the health sector. To worsen the situation, even with what is allocated to the health sector, budget performance is poor because what is released is much lower than what is budgeted. In addition to all this, the country is not getting value for money spent (low efficiency).

“This has made Nigeria to be donor-dependent in implementing some of its health programmes. Even a large chunk of the budget is spent on recurrent expenditure, leaving too little for capital expenditure. This explains the paucity of functional health facility equipment and dilapidated infrastructure.

“Nigerian leaders at all levels must show political will and commitment to fund the health sector well. The national health insurance scheme and state health insurance must be improved upon to have much higher coverage. In addition, at all levels, there must be transparency and accountability,” the don mentioned.