**1.1 Universal health coverage in Nigeria**

In 2005, the pervading global inequality in access to healthcare prompted the World Health Assembly to pronounce a resolution on Universal Health Coverage (UHC) [1]. UCH rests on two essential bedrocks: equitable access to quality healthcare and protection from financial risk. UHC forms target 8 of the United Nation's Sustainable Development Goal 3 (SDG 3). It also plays a crucial role in achieving other important SDGs, such as poverty reduction (SDG 1), gender equality (SDG 5), inclusive economic growth (SDG 8) and reduced general inequalities (SDG 10) [2–5].

The prevailing poor health indices and extreme poverty in the sub-Sahara African region, especially in Nigeria, have been attributed to inequality in access and financial protection in healthcare utilisation [4, 6, 7]. In 2000, Nigeria was ranked by the WHO as the fourth country with the worst health system, only

topping three war-torn nations [8]. After two decades, Nigeria still has one of the worst health indices in Africa (see **Tables 1**–**3**), despite being Africa's largest economy in terms of Gross Domestic Product (GDP) and most populous country with an abundance of both human and material resources [5, 9–11]. For instance, while Nigeria's infant mortality rate in 2015 was 69 deaths in every 1,000 live births, the respective figures for neighbouring Africa countries like Ghana, Niger and Cameroon were 43, 57 and 57 per 1,000 live births [12]. The maternal mortality ratio of 814 per 100,000 live births in Nigeria exceeds only those of three countries in Africa [5, 12]. Moreover, the country has the highest number of extremely poor people worldwide after India [13]. Although these abysmal indices were derived from multiple factors, the issue of poor equitable access and exposure to financial hardship arising from catastrophic healthcare costs is the most significant.

A proven mechanism for achieving the objectives of UHC is the institution of a suitable mechanism of health financing [14]. Health Financing is a mechanism by which funds are generated, mobilised and utilise for healthcare [1, 15]. An effective healthcare financing mechanism gives people adequate financial protection from impoverishment arising from health services utilisation [14]. In Nigeria, health financing has been predominantly through out-of-pocket (OOP) spending - a regressive form of health financing. OOP payment accounts for about 69% of total healthcare expenditures in Nigeria [16]. As a result, poor households in Nigeria are either unable to access quality healthcare or face financial hardship from healthcare spending [1, 2]. More often than not, OOP payment makes people refrain from utilising health services, present late to health facilities, or patronise sub-standard healthcare facilities. OOP expenditure produces inequity because quality healthcare is only available to those who can pay and not those who need it. In most instances,


#### **Table 1.**

*Life expectancy at birth (total) (in years) in Nigeria compare with selected African countries (composed from world development indicators 2021).*


#### **Table 2.**

*Mortality rate, under-5 (per 1,000 live births) in Nigeria compare with selected African countries (composed from world development indicators 2021).*


#### *The Implications of Health Financing for Health Access and Equity in Nigeria DOI: http://dx.doi.org/10.5772/intechopen.98565*

**Table 3.**

*Key demographic, health and economic indicators- Nigeria, Ghana and Thailand (2016–2017).*

the poor and vulnerable groups, most in need of the services, have to sell their valuables, incur debts, or spend the family savings to access healthcare, resulting in further impoverishment. This phenomenon is referred to as catastrophic health spending [1, 17–20].

A household is usually classified as having incurred catastrophic expenditure "if it spends 40% or more of its discretionary (non-food), or 10% or more of its total expenditure on healthcare" [21]. Catastrophic health expenditures arise not only from direct spending on transportation to health facilities, treatment, investigations, medication and hospitalisation, but also from indirect costs resulting from depreciating health status and a resulting reduction in productivity [16]. Consequently, a household is caught up in a cycle of perpetual poverty (**Figure 1**). Ilesanmi et al. show an increase in poverty of 66.2% due to OOP spending on healthcare, especially among households in the rural communities in Nigeria [23]. Since more than 50% of Nigerians, representing more than 100 million people, live below the poverty line, catastrophic health expenditure is endemic [16, 20, 24]. This situation, therefore, calls for an urgent need to break this cycle of poverty and health-related misery by eliminating OOP payments.

#### **1.2 Nigeria health system financing and relevant policies**

Healthcare in Nigeria is financed through government budgetary allocation, donor funding, NHIS and private funding. The Nigeria 1999 Constitution empowers all the three tiers of government (federal, state and local) to mobilise and deploy resources to provide healthcare in their jurisdiction [24, 25]. The Nigerian government expenditure on health is less than nearly those of any country in the world (see **Figures 2–5**) [27, 28]. For example, only 4% of the federal budget was allocated to health in 2018 (below the 15% commitment of the 2005 Abuja Declaration). The situation is worse in the states and local government, where even less is allocated to health [1, 3]. This reflects the value the government places on health and it is the most significant challenge faced in achieving UHC by Nigeria [15, 25].

Even though Nigeria is the leading recipient of Developmental Assistance for Health (DAH) in Sub-Sahara Africa, the fund constitutes only about 4% of the

#### **Figure 1.**

*Cycle of impoverishment due to out-of-pocket (OOP) health spending by poor households. (Adapted from Han [22]).*

*The Implications of Health Financing for Health Access and Equity in Nigeria DOI: http://dx.doi.org/10.5772/intechopen.98565*

#### **Figure 2.**

*Public health expenditure (% of total expenditures) in selected African countries. (Source: World Development Indicators).*
