Nigeria's healthcare sector fueling the nation's competitive edge

Nigeria is embarking on a journey towards a more market-oriented governance framework, and this shift is especially relevant in the realm of healthcare policy. The urgent need is to institute a paradigm shift that emphasizes sovereignty, competitiveness, and private sector partnership.

The demand for medical services in Nigeria is growing rapidly, yet the supply is not keeping pace. As a result, over 70% of health expenditure is shouldered out-of-pocket by Nigerians, with insurance coverage being extremely low, with fewer than 5% of the population enrolled.

To address this issue, reinsurance schemes and matching grants could incentivize insurers to design affordable packages for low-income workers. Additionally, policies such as land concessions, infrastructure subsidies, and public guarantees would stimulate private investment in healthcare infrastructure and logistics.

The private sector, while delivering over 60% of healthcare services in Nigeria, is fragmented and often inaccessible to rural and low-income populations. To bridge this gap, the National Health Insurance Authority (NHIA) and National Social Insurance Trust Fund (NSITF) must collaborate to deepen inclusion and reduce catastrophic out-of-pocket expenses.

Weak Public-Private Partnership (PPP) frameworks in healthcare are a significant barrier. Scaling such models under enforceable, transparent contracts could attract significant investment. Executive Order 7 (2019), originally focused on road infrastructure, should be expanded to cover hospitals and health facilities, especially in underserved areas.

The Healthcare Federation of Nigeria, in partnership with the Nigerian Investment Promotion Commission and the IFC, has developed a policy prescribing reforms for service registration and equipment importation. Long-term, single-digit credit, tax breaks on critical inputs, and blended finance facilities are needed to address financing constraints in the healthcare sector.

The private sector's footprint in Nigeria's healthcare sector is not without its challenges. Over 2,000 doctors emigrate from Nigeria annually, and medical tourism drains an estimated $1 billion yearly due to weaknesses in the healthcare system. Access to credit for healthcare investors remains a major barrier, with healthcare investors facing interest rates above 20%.

However, the private sector has raised standards in infrastructure, technology, and specialist services. One example of private sector innovation is the emergence of startups focusing on personalized medicine, wearables, telemedicine, and mobile health, with operations in cities like Lagos. Telehealth platforms like Masimo SafetyNet provide cloud-based patient management and continuous clinical monitoring technologies adaptable for home use.

Despite these strides, the Nigerian healthcare system continues to suffer from outdated equipment, weak infrastructure, and a high patient-to-doctor ratio of 1:5,000, exceeding the WHO recommendation of 1:600. The high patient-to-doctor ratio contributes to poor access to care.

The Garki Hospital concession in Abuja demonstrated the benefits of private management, but also exposed gaps in sustainability and transparency. Fewer than 5% of Nigerians are insured, and current reforms around the National Identity Number (NIN) present opportunities to expand coverage, reduce fraud, and strengthen risk pooling.

In conclusion, Nigeria's healthcare sector has significant potential but is underdeveloped, underutilized, inadequately resourced, and overstretched. A pragmatic, market-oriented approach, coupled with strategic policy reforms, could help transform this sector and ensure accessible, quality healthcare for all Nigerians.