By Divine Ebubechukwu
Nigeria is facing a significant obstacle due to its large population and expanding healthcare requirements: the persistent increase in healthcare expenses. This growing financial burden affects millions of people’s health and well-being and poses a threat to the country’s progress toward universal health coverage, making it more than just an economic problem.
The excessive dependence on out-of-pocket (OOP) payments is a major factor in this crisis.
According to estimates, more than 70% of Nigerian healthcare spending is paid for out of pocket. (Kikelomo O. et al. 2025) This stands in stark contrast to the global average of 16% for OOP expenditure and the African average of 36%. This implies that families frequently have to pay for all medical consultations, diagnostic tests, and other expenses when illness strikes, frequently leading to catastrophic health expenditures and pushing many into poverty. Recently, we hear of cases where people die because their family members are not able to afford hospital bills. Research indicates that OOP health payments can push about 1.3 million Nigerians below the poverty line.
This rising trend in healthcare expenses is fueled by a number of factors:
1. Import Dependency and Exchange Rate Fluctuations: Nigeria imports a significant amount of its pharmaceutical and medical supplies. Higher import prices are a direct result of the unstable exchange rate, which is typified by the Naira’s depreciation, and these costs are subsequently transferred to the patients. In addition to raising costs, this significant reliance on imports restricts access to necessary medications, particularly in rural areas (David O. A., et al. 2025).
2. Insufficient Human Resources and Healthcare Infrastructure: Nigeria has more than 200 million people, and its healthcare system is inadequate and underdeveloped. Many facilities are overcrowded, lack contemporary equipment, and frequently experience drug shortages. This is made worse by a serious lack of medical professionals due to significant “brain drain,” where trained personnel migrate abroad for better working conditions and remuneration. This creates a supply-demand imbalance, further driving up the cost of available services. The doctor-to-patient ratio in some states is as high as 1 doctor per 5,000 patients, significantly below the WHO recommendation of 1 per 600.
3. Limited Health Insurance Coverage: Despite the establishment of the National Health Insurance Scheme (NHIS), and its evolution into the National Health Insurance Authority (NHIA) Act in 2022, health insurance coverage remains remarkably low. Less than 10% of Nigerians are covered by any form of health insurance, with the informal sector, representing over 60% of the workforce, being largely uninsured. This leaves the vast majority vulnerable to the financial shocks of illness.
4. Low Public Health Expenditure: Nigeria allocates a meager percentage of its national budget to healthcare, often falling short of the Abuja Declaration target of 15%. This underfunding perpetuates the cycle of inadequate infrastructure, insufficient personnel, and a reliance on user fees.
These rising costs have disastrous consequences. Many Nigerians delay or forego essential medical care due to inability to pay, leading to poorer health outcomes, increased mortality, and a lower quality of life. (Aregbeshola B.S et al). It also imposes a tremendous burden on household incomes, as many households are forced to deplete savings, sell assets, or accumulate debt, which further impoverishes them. Addressing this public burden is complex. It is essential to expand full health insurance coverage to all Nigerians, particularly the poor and those working in the informal sector. This can be achieved through innovative financing mechanisms and increased government expenditure. Local pharmaceutical production can be consolidated to reduce importation dependence and guarantee drug prices. Furthermore, focused investments in the healthcare infrastructure, training and retention of medical professionals, and prioritizing primary healthcare services are critical steps toward the establishment of a more robust and affordable healthcare system for all Nigerians (Masslife Healthcare Limited 2025).
References:
Kikelomo O. W, Adeyinka A, Adedayo A, Olufunsho A, Temiloluwa F, Omoyeni A, Biola Emmanuella Z, Hussein A. Faith O, Olusegun O, Akin A (2025). Factors associated with Catastrophic Healthcare Expenditure in communities of Lagos Nigeria: A Megacity experience. Retrieved from https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0316814
Tochukwu Okafor; Businessday NG. (2021). How Nigeria’s healthcare cost quietly drives inflation. Retrieved from https://businessday.ng/health/article/how-nigerias-healthcare-cost-quietly-drives-inflation/
Aregbeshola BS, Khan SM. Out-of-Pocket Payments, Catastrophic Health Expenditure and Poverty Among Households in Nigeria 2010. Int J Health Policy Manag. 2018 Sep 1;7(9):798-806. doi: 10.15171/ijhpm.2018.19. PMID: 30316228; PMCID: PMC6186489.https://pmc.ncbi.nlm.nih.gov/articles/PMC6186489/
Grandville Medical & Laser. (2025). Affordable Healthcare: How Can Hospitals Improve Access for the Common Man?. Retrieved from https://gml.com.ng/2025/03/06/affordable-healthcare-how-can-hospitals-improve-access-for-the-common-man/
Masslife Healthcare Limited. (2025). Rethinking Healthcare Funding in Nigeria: A Call for Self-Reliance. Retrieved from https://masslife.com.ng/rethinking-healthcare-funding-in-nigeria-a-call-for-self-reliance/
National Health Insurance Authority. (n.d.). FINANCIAL ACCESS TO HEALTHCARE FOR ALL NIGERIANS. Retrieved from https://www.nhia.gov.ng/
David O. A; Joshua A. A; Rhoda O. O; Esther O. O, (2025). Nigeria’s Pharmaceutical Industry: Addressing Over-Reliance on Importation and Proposing Sustainable Solutions. Retrieved from https://pubs.lib.umn.edu/index.php/innovations/article/download/6502/3826/37779
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