Health Financing

There is growing attention towards the implementation of pro-poor health care financing strategies in Nigeria as a way to achieve universal health coverage (UCH).  This is to improve widely documented poor health outcomes in a health system characterized by limited public spending on health and catastrophic out-of-pocket (OOP) expenditure.

Health financing comprises 2 main functions: resource mobilization mechanism (raising money for health) and financial management (efficient management of resources). The interplay between the core functions of health financing are brought to light by studies that have shown that increased financial resources for health do not necessarily translate to improved health due to poor financial management. The bottlenecks in health financing mechanisms employed in Nigeria manifest via weakly coordinated pooling mechanisms, lack of strategic purchasing, and unsustainable risk pools. In addition, there is limited high-quality evidence to inform these potential health financing options. Where viable options have been implemented in Nigeria, evidence available is mostly anecdotal. Synthesizing evidence on the complete picture of major health financing mechanisms/reforms in Nigeria is difficult, because even when evidence is available, it is not easily accessible.

These are factors that have historically affected governance and planning of health financing, reinforcing poor health outcomes. There is therefore the need to lay out and understand Nigeria’s health care financing options, the pressures and challenges of the current arrangements, and canvass analytical questions on which way forward, in order to inform policy and improve the health of Nigerians.

Ultimately, researchers, implementers, and policy makers seek to answer the question: What health care financing strategies would provide equitable, efficient, and affordable health care to all Nigerians?

Our Goals

The health financing team at HSDF is interested in contributing significantly to help address this knowledge gap, as well as providing recommendation, designing, and implementing health financing policies that would provide equitable, efficient, and affordable health care to all Nigerians.

Our Approach

We aim to achieve our goal using a multifaceted approach, which includes:

  • Conducting and Supporting analytical studies (fiscal space analysis, costing studies, and diagnostics) to understand constraints to resources, and inform cost implications and design of tailored health financing interventions.
  • Providing technical assistance (TA) to develop, design, and implement evidence-based health financing strategies.
  • Synthesizing high-quality evidence from past health financing strategies or reforms (evaluations), and economic analysis of health interventions to inform effectiveness and value for money of potential health financing options and interventions.


Our previous work on health financing in Nigeria include studies on fiscal space analysis, public expenditure reviews, and conceptualization and design of social safety net health programs.

Fiscal Space Analysis

An analysis of the fiscal space for the Saving One Million Lives (SOML) Initiative – In collaboration with Results for Development (R4D) we analyzed the resource needs required to achieve the SOML objectives (improve utilization and quality of high impact reproductive child health, and nutrition), assessed available and likely financing, and developed strategies for closing funding gaps. This analysis informed the decision by the ministry of finance to commit $200mn over a four-year period towards implementing the PMTCT national scale up plan.

Resource Tracking study

Working with a team of experts from the World Bank, we conducted a public expenditure management review (PEMR) in Ekiti and Niger state in 2013. Specifically, we reviewed the governance and accountability mechanisms in their health sectors, the interplay between budget planning and execution, and the approach to resource allocation and use. Building on this important piece of work, the World Bank is piloting an expenditure tracking system that will ensure health budgets are responsive to the needs of the poor.

Program for Results (P4R)

The HSDF team was involved in the conceptualization, design and development of the SOML P4R, a $500mn World Bank program that aims to strengthen governance; increase accountability, improve management and ultimately health outcomes by incentivizing performance.

National Social Safety Nets program (NSSNP)

The government of Nigeria put together an inter- sectoral team to develop a social safety nets program aimed at reducing extreme poverty among targeted households. The team, which was chaired by HSDF designed and costed the NSSNP. The program design was lauded by donor partners and an agreement in principle was reached with the World Bank to support its implementation with a $500mn credit. The program was also ratified by the Economic Management and Implementation Team (EMIT) of the last administration and approved for implementation by the immediate past president of Nigeria.

Financing for immunization (TA)

In the first quarter of 2015, approved budgets for the procurement of vaccines were below financing requirements and the gains in Nigeria’s march towards eradication of polio were threatened. HSDF provided technical support to a multi-sectoral team from the National Primary Health Care Development Agency (NPHCDA) and the Ministry of Finance in securing a $200mn credit for vaccine financing.

Financial management diagnostics

As part of the PHC systems strengthening program (Learn more about PHC systems Strengthening: link) implemented by HSDF, the health financing unit carried out diagnostics studies to review the drivers of poor financial management in 3 focal states (Kaduna, Niger, and Nasarawa) to inform interventions that aim to improve expenditure management, transparency, and accountability around resource flows in the states.

Ongoing work

Technical assistance

We currently provide technical assistance to the health financing Technical Working Group in Kaduna state to help develop a state health financing strategy. Specifically, we are working with the state officials to provide evidence-based health policy options to steer the group towards developing an effective, feasible, and sustainable health financing strategy in Kaduna state.

Evidence synthesis

  • We are conducting reviews on evidence of social and community health insurance schemes in low and middle income countries, with the aim of learning lessons from other countries and identifying options for the successful administration and management of such schemes
  • We are providing research support to the Health Policy and Research Group (HPRG) Nigeria (the lead research organization) to conduct 2 studies: (1) An evaluation of the National Health Insurance Scheme-Maternal and Child Health (NHIS-MCH) program (2) A political economy analysis (PEA) on the feasibility of implementing different options of health financing schemes in Nigeria. Findings from this study would inform the National health financing strategy, which is currently being developed.

Cost-effectiveness analysis

The Health Financing unit is currently collaborating with the Quality Improvement team to conduct a cost-effectiveness evaluation of the collaborative learning platform intervention. The aim of this intervention is to use learning platforms implemented by the quality team to improve maternal and child health outcomes. The study site is spread across 11 local government areas (LGAs) in Lagos state across 40 health facilities.