1: Persistent Challenges Facing Nigeria’s Health Market
Nigeria’s health market faces numerous systemic challenges that have hindered the realization of equitable and quality health services for its population of over 220 million people. Among the most pressing is the overreliance on out-of-pocket (OOP) health spending, which accounts for over 70% of total health expenditure. This disproportionate burden has led to catastrophic health expenditures and driven millions of Nigerians into poverty each year. Additionally, poor infrastructure, low health worker-to-patient ratios, frequent stock-outs of essential medicines, and limited access to diagnostic and treatment facilities—especially in rural areas—continue to undermine service delivery. The limited government investment in health, consistently below 5% of the national budget (far from the 15% Abuja Declaration target), further compounds these issues, making the health sector chronically underfunded and unable to meet the growing demands of its population.
2:Weak Health Insurance Penetration and Inequitable Access
Another significant impediment is the low coverage of health insurance, despite efforts by the National Health Insurance Authority (NHIA). As of 2024, only about 19% of Nigerians were covered under any form of health insurance, with formal sector workers accounting for the majority of beneficiaries. The informal sector—which makes up over 80% of Nigeria’s labor force—remains largely uninsured due to structural, financial, and awareness barriers. This limits risk pooling and drives high OOP payments. In addition, disparities in access to quality healthcare are glaring between urban and rural communities, as well as among different socio-economic groups. The lack of consistent implementation of the Basic Health Care Provision Fund (BHCPF) across all states has also limited the impact of government efforts to strengthen primary healthcare and improve coverage among vulnerable populations.
3:The Role of the Public Sector in Market Regulation and Service Provision
The public sector plays a central role in creating an enabling environment for a functioning health market system. This includes developing health policies, regulatory frameworks, and budgetary allocations to strengthen the healthcare delivery system. In recent years, initiatives such as the Health Sector Renewal Investment Program (HSRIP), the revitalization of primary health care centres, and the implementation of performance-based financing models have shown promise. However, these efforts have been hindered by poor coordination, limited political will at sub-national levels, and fragmented data systems. For the public sector to be effective, there is a need for increased budgetary commitments, improved accountability mechanisms, and stronger intergovernmental collaboration to drive health reforms across federal, state, and local government levels.
4:The Private Sector’s Expanding Role in Health Service Delivery
With over 60% of health services in Nigeria delivered by the private sector, its role in the health market cannot be overstated. Private providers, health maintenance organizations (HMOs), pharmaceutical companies, and diagnostic service firms have continued to fill gaps left by the public sector. Their contributions include providing specialist services, investing in modern diagnostic tools, and expanding health insurance offerings. Yet, the sector operates in a largely unregulated and fragmented manner, leading to variations in service quality and pricing. Strengthening partnerships through Public-Private Partnerships (PPPs), regulatory oversight, quality assurance standards, and incentivizing private investments in underserved regions can enhance the sector’s contribution toward equitable healthcare access.
- Innovation, Technology, and Local Manufacturing as Catalysts for Reform
Health technology and innovation are essential for expanding access and improving the efficiency of health service delivery. Nigeria has witnessed a growing number of digital health startups offering telemedicine, electronic health records (EHRs), health financing platforms, and logistics solutions for medicine distribution. These innovations have the potential to reduce service delivery costs, reach remote populations, and improve disease surveillance. Similarly, investing in local pharmaceutical and diagnostic manufacturing is critical for reducing dependency on imports, stabilizing supply chains, and making medicines more affordable. Government incentives, such as tax breaks, favourable loan terms, and infrastructure support, will be essential to drive this industrialization in the health sector.
- Strategic Approaches to Improve Health Market Functionality and Coverage
To improve Nigeria’s health market system and expand health coverage, a multi-pronged strategy is required. This includes increasing government health financing to at least 15% of the national budget, expanding mandatory health insurance to cover informal and rural populations through subsidies and flexible payment options, and strengthening the NHIA’s oversight of health insurance providers. Investments must prioritize revitalizing and equipping primary health care centers, integrating them into referral networks, and staffing them with well-trained health workers. Data-driven decision-making, robust monitoring and evaluation systems, and community engagement are also vital to ensuring that health interventions are relevant, equitable, and impactful. Additionally, engaging civil society organizations to build trust and promote awareness can improve enrolment and utilization of health services.
- A Shared Responsibility Toward Achieving Universal Health Coverage
Ultimately, achieving a functional and inclusive health market system in Nigeria requires a shared commitment from all stakeholders—government, private sector, development partners, and communities. While the government must provide strong leadership, policy frameworks, and funding, the private sector must bring in efficiency, innovation, and resources. Donor agencies and non-governmental organizations can play a supportive role in capacity building, system strengthening, and bridging funding gaps. Communities, on the other hand, must be empowered through health literacy, engagement in planning processes, and accountability structures. With sustained investments, transparent governance, and strategic partnerships, Nigeria can overcome its health system challenges and pave the way toward universal health coverage for all its citizens.
In conclusion, Nigeria’s health market holds immense potential to deliver quality and affordable care to its growing population. However, addressing the persistent challenges of poor financing, limited insurance coverage, infrastructure gaps, and workforce shortages requires coordinated efforts from both the public and private sectors. By embracing innovative solutions, strengthening regulatory frameworks, expanding health insurance, and investing in primary healthcare, Nigeria can build a resilient health system that ensures equitable access and accelerates progress toward universal health coverage.
