With a new federal health bill in the works and steadily increasing private sector participation in many areas, Nigeria’s health care sector is potentially on the brink of a period of sustained expansion. In the six decades since independence, the national health care network has improved on a piecemeal basis, driven primarily by a handful of international organisations and, more recently, government entities at the federal, state and local levels. While most health indicators have yet to improve substantially, many local players are cautiously optimistic about the future of the sector.
“Nigeria has numerous plans for improving health care throughout the country,” Dr Tolu Arowolo, a public health physician in Nigeria, told OBG. “However, implementing these plans thoroughly, within budget and in a reasonable amount of time is another issue.”
CHALLENGES: Indeed, Nigeria faces a variety of major, systemic challenges at all levels when it comes to health care. The government has struggled to provide basic services for much of the population. The national health system is perennially underfunded, health insurance is underutilised and public awareness about medical issues is lacking. Infant and under-five mortality rates are among the highest in the world, according to World Health Organisation (WHO) data. The disease burden includes high rates of a number of communicable diseases as well as rising levels of non-communicable illnesses. The government is working to address these and other issues with a number of new initiatives, which are expected to result in a jump in public sector funding and private sector involvement in health care.
HISTORY: Nigeria has been home to organised health care for more than a century. In the early 1880s the Church Missionary Society, an Anglican entity, established the country’s first health dispensary, at Obosi, north of Port Harcourt in the south-east. Over the next decade Roman Catholic and American Baptist missionaries set up similar facilities throughout the country. In 1889 the British colonial government established the nation’s first government-operated civilian hospital – the St. Margaret’s Hospital – in the south-eastern city of Calabar, which served as the national capital for a brief period in the late 19th century.
By 1960 the country was home to a nationwide network of 101 government-run hospitals and 118 missionary hospitals. The nascent government laid out the framework for the current health care system during this period, wherein the Federal Ministry of Health (FMH) was responsible for funding individual communities and states, which were in turn responsible for administering care on the ground. This system was codified and expanded further under the Fourth National Development Plan (1981-85), which described a national network of comprehensive health centres, primary health centres and health clinics, all of which would serve communities of varying size. Like earlier plans, the network was funded by the federal government and implemented at the state and community level. This three-tiered system, with a handful of minor improvements and variations, is still in place today.
ORGANISATIONAL FRAMEWORK: As of early 2013 Nigeria’s health care sector was managed by a variety of federal, state and local organisations. The public health system is administered by the FMH, 37 state health ministries and around 1300 health centres, which are managed by and serve the country’s 774 local government areas (LGAs). The FMH is responsible for developing national health policies and standards, and funding the implementation of these initiatives at the state and local levels. Each of Nigeria’s 36 states (plus Abuja, the federal capital territory) is home to a separate health ministry, which is responsible for recruiting and training the medical workforce and allocating resources to the LGAs, as well as implementing the plans passed down from the FMH. Finally, the local health centres are responsible for providing primary care services to all citizens within a given catchment area.
A number of public sector entities and programmes operate on a semi-independent basis under the umbrella of the FMH. The National Agency for Food and Drug Administration and Control (NAFDAC), for example, regulates and enforces health standards in relation to the manufacture, import and export of food and drug products, including pharmaceuticals. The National Health Insurance Scheme (NHIS), meanwhile, provides state-sponsored medical coverage to vulnerable populations, such as children, the elderly and the disabled, among others. Finally, the National Primary Healthcare Development Agency supports the implementation of basic services at the state and LGA level.
DEVELOPMENT PLANS: Over the past decade Nigeria’s various public health authorities have introduced a number of development plans for the sector. The FMH’s National Strategic Health Development Plan (2010-15), which was launched in November 2010, was designed to serve as “the overarching framework for health development” in the country, in line with Vision 20:2020, the government’s long-term economic development strategy. The initiative targets improvements in a variety of key areas including life expectancy; infant, under-five and maternal mortality rates; and immunisation rates for a variety of diseases. The plan is broadly based on the UN’s Millennium Development Goals, which have served as a framework for national health development in Nigeria since 2000.
HEALTH BILL: A new National Health Bill (NHB), which has been making its way through the federal government for more than five years, could have a major impact on the sector. The legislation, initially introduced to the National Assembly in 2006, would create a new national health care development fund, to be financed by the country’s existing consolidated revenue fund. The new expenditures are expected to be put toward expanding basic services to rural areas, many of which are currently underserved; the procurement of drugs and medical equipment; training and education for primary health care professionals; and the construction and maintenance of national health care infrastructure (see analysis). The National Assembly passed the NHB in May 2011, but in 2012 President Goodluck Jonathan declined to sign it into law, due primarily to a handful of bureaucratic disputes among stakeholders. As of August 2013 the bill was still delayed, in large part due to the controversial issue of 2% funding from consolidated revenue as well as internal debate.
EXTERNAL PARTICIPATION: In addition to the public sector, a number of international and private sector entities have also come to play a major role in health care provision at all levels. Formal international involvement in the country can be traced back to the 1960s, when the newly independent country joined the WHO. Since then, the WHO has become a major stakeholder in the health sector. “There are many issues that have yet to be addressed in Nigeria,” Arowolo told OBG. “After years of focusing on quick wins, now the health sector is working on developing long-term solutions.”
Other major players in the sector include foreign development agencies, such as the UK’s Department for International Development and the US Agency for International Development; international non-governmental organisations (NGOs), such as the US-based Clinton Foundation and the Bill and Melinda Gates Foundation; and local NGOs, such as the Afrihealth Optonet Association, which consists of a national network of around 600 community health organisations.
BY THE NUMBERS: One of the major hurdles that health care providers in Nigeria currently face is a lack of reliable, up-to-date health statistics, which makes long-term planning especially challenging. According to data from the WHO, as of the end of 2011, life expectancy at birth was 53, compared to a regional average of 56 and a global average of 70. Similarly, in 2011 the under-five mortality rate per 1000 live births was 124, compared to 107 in the region and 51 globally. The maternal mortality rate in the same period was also higher than average, at 630 per 100,000 live births, compared to 480 in the region and 210 worldwide.
While these figures have come down over the past few decades – the under-five mortality rate was 214 per 1000 live births in 1990, for example – they remain among the highest in the world. Indeed, in the World Economic Forum’s 2012-13 “Global Competitiveness Report”, Nigeria ranked 134th out of 144 nations for life expectancy, 139th for infant mortality, 141st for malaria prevalence, 130th for HIV/AIDS prevalence and 101st for the prevalence of tuberculosis.
WORKFORCE: The health workforce has expanded rapidly over the years. According to data published in the Nigerian Medical Journal, in 1960 there were 1079 physicians and 7978 nurses and midwives working in the country. Midwives are a key component of the health care system in Nigeria, especially in rural areas. These figures jumped considerably over the next 50 years, in line with Nigeria’s rapidly expanding population. Indeed, by 1990 the population had risen to around 97.5m, according to data from the UN (up from 46m in 1960), while the number of physicians and nurses and midwives had jumped to 16,000 and 95,000, respectively, which is equal to around 1.6 physicians and 9.7 nurses and midwives per 10,000 Nigerians.
Finally, the population has increased to around 168.8m and, according to the WHO, as of 2012 the number of physicians had risen to around four per 10,000, and the number of nurses and midwives had grown to around 16.1 per 10,000. These most recent figures compare to global averages of around 14 physicians and 29 nurses and midwives per 10,000 people.
PAYING FOR IT: In the 2013 federal budget the government allocated N279.23bn ($1.76bn) for health care, which is equal to around 5.68% of the total budget, down slightly from 5.9% in the 2012 budget, though up substantially from 4.9% in 2011 and 3.98% in 2010. In general, public expenditure on health care in Nigeria is low compared to international averages. In recent years per capita government expenditure on health has fluctuated between $21 and $29, according to WHO data, compared to a global average of around $615. Government health expenditure made up 36.7% of total health spending in 2011, according to WHO data, up from 31.5% in 2010 and 31.4% in 2009.
The remainder of health care expenditure comes from the private sector. In recent years NGOs and other private organisations have accounted for around 3% of annual spending. Individual out-of-pocket spending makes up the remaining 60% or so. Indeed, most Nigerians pay their own way, either through local insurance companies or simply outright. Many wealthy – and, increasingly, middle class – nationals travel abroad for medical care, with the US, the UK and India being especially popular destinations, though this option remains out of reach for the majority of the population.
INSURANCE: An estimated 2-5% of Nigerians are enrolled in a formal health insurance programme, primarily through the federal NHIS, private employers or trade groups. Since it was established in 1999, the NHIS has become a major presence in the country, providing coverage to a variety of populations, including the unemployed, children and the disabled.
By the end of 2012 the NHIS had issued more than 4m identity cards; cardholders can access insurance services via any of the 62 health maintenance organisations (HMOs) registered with the programme. Additionally, by the end of 2012 the NHIS had accredited 5949 health care providers, 24 banks, five insurance companies and three insurance brokers to operate under the plan. While the NHIS is still relatively small-scale – according to the Nigerian Medical Association it covered just 3% of the population as of May 2013 – in recent years many local stakeholders have called for it to be extended to cover the entire population. Indeed, a bill making its way through the National Assembly in early 2013 would make joining the NHIS mandatory for large swathes of the population.
“The NHIS is aiming to achieve 30% inclusion by 2015, and I am confident this can be achieved with the correct funding and strong political commitment,” Dr Abdulrahman Sambo, acting executive secretary of the NHIS, told OBG. “If the NHIS grows at expected rates, it will create an explosion in the health insurance space, as private HMOs are partnered to promote efficiency.”
PUBLIC HEALTH: According to the government’s 2010-15 health development plan, which was released in November 2010, the country “shoulders 10% of the global disease burden”. Nigeria is one of just three countries worldwide where polio is still endemic. According to data from the Global Polio Eradication Initiative, there were 122 confirmed cases in Nigeria in 2012, compared to 58 in Pakistan and 37 in Afghanistan. Confirmed cases in Nigeria were concentrated in the rural north, where a lack of awareness about polio among the population has hampered vaccination efforts.
MALARIA: Other widespread communicable diseases include malaria, HIV/AIDS and tuberculosis, among others. According to data released by the government’s National Malaria Control Programme (NMCP), which falls under the FMH, malaria is responsible for 60% of outpatient visits, 30% of childhood deaths and 11% of maternal deaths in Nigeria. Additionally, the programme estimates that annual malaria-related financial losses in the country total N132bn ($831.6m).
“Africa accounts for around 90% of global malaria deaths, and Nigeria accounts for some 25% of Africa’s malaria deaths,” said Arowolo. As of early 2013, under the NMCP, which is affiliated with the UN’s Global Malaria Action Plan, the government has distributed nearly 52m insecticidal mosquito nets. The state’s efforts, which have been supported by a wide range of international organisations, have had a positive impact in recent years. According to WHO data, in 2011 there were 3353 confirmed malaria-related deaths, down from 4238 in 2010, 7522 in 2009 and 8677 in 2008. HIV/AIDS: Nigeria has also seen a dramatic decline in new HIV/AIDS cases over the past decade. Data released by the Nigerian Institute of Medical Research, a government-run research entity, reported that the country recorded a 20% decline in new HIV/AIDS infections from 2001 through 2011.
That said, according to a late 2012 document published by the National Agency for the Control of AIDS – a government organisation that was established in 2000 – the country is home to the second-largest HIV/AIDS population in the world, with around 3.1m people infected. Women make up some 60% of this total. In addition to the state’s HIV programme, which focuses primarily on prevention and treatment through the distribution of anti-retroviral drugs, most of the international players are active in this area as well.
NON-COMMUNICABLE BURDEN: In addition to communicable diseases, which remain a major challenge in Nigeria, over the past five years non-communicable diseases have become increasingly prevalent as well. Confirmed cases of hypertension (high-blood pressure), diabetes, cancer and chronic lung disease are on the rise. According to a handful of recent studies from the WHO and the Nigerian Heart Foundation (NHF), among other organisations, some 25-40% of Nigerians currently suffer from hypertension, while roughly 5-10% are diabetic and 2-5% have cancer. The jump in these figures in recent years can be attributed to changing eating habits and an increase in sedentary lifestyles, particularly among middle-class residents in urban areas. Other risk factors include growing alcohol and tobacco consumption rates. “The rise of non-communicable diseases represents a significant threat to the Nigerian population, due in no small part to the fact that the population is still faced with a high rate of communicable diseases,” Enrico Liggeri, the country manager at pharmaceuticals producer Pfizer, told OBG.
The key is to focus on both. “Nigeria is currently facing the double whammy of communicable disease and non-communicable disease,” Dr Ladi Awosika, managing director of Total Health Trust, told OBG. “Given the limited resources in the health care industry, it would be a mistake to shift too many resources to treatment of non-communicable diseases. The focus must remain on prevention and awareness of both types.”
PHARMACEUTICALS: Nigeria is widely considered to be a key growth market among international pharmaceuticals companies. The pharmaceuticals sector has seen an uptick in investment activity, with a handful of firms currently working to upgrade their production facilities in an effort to qualify for WHO certification, which would then allow them to participate in international tenders for medicine released by the WHO and other international NGOs and agencies.
As of early 2013 the WHO and the Global Fund to Fight AIDS, Tuberculosis and Malaria (a multinational public-private entity) spent around N20bn ($126m) annually on drug procurement for programmes in Nigeria. Historically, however, most of the procurement contracts for these drugs have gone to WHO-approved firms located in India and Latin America. By the end of 2013 five Nigeria-based pharmaceuticals companies are expected to have been prequalified by the WHO – namely Swiss Pharma Nigeria, Evans Pharmaceuticals, Chi Pharmaceuticals, May and Baker, and Fidson Healthcare. These firms have spent the past few years upgrading their production facilities and operational structures in line with WHO regulations. According to the Pharmaceutical Manufacturing Group of the Manufacturers’ Association of Nigeria, as of early 2013 the nation supplied around 60% of the medicines consumed in the Economic Community of West African States region. Estimates of the industry’s size vary, from $600m to around $900m, with around 300-400 registered pharmaceuticals companies active in the sector. The great majority of these are very small firms that produce or import over-the-counter (OTC) drugs, such as paracetamol, for distribution within a state or community.
MEDICINE MEN: According to estimates from Pfizer, multinational firms account for around 20% of the pharmaceuticals segment. In addition to Pfizer, major international players that are currently active in Nigeria include GlaxoSmithKline, Johnson & Johnson and Ranbaxy Laboratories, the latter of which is the generics arm of the Japanese company Daiichi Sankyo.
Local pharmaceuticals suppliers face a number of hurdles, including the unreliable national power supply, which is considered to be a major deterrent for local manufacturing; distribution challenges, including an under-developed national road transport network; low purchasing power among the population; and high circulation of counterfeit drugs.
“Nigeria is not a sophisticated market,” Colin Cummings, the chairman and CEO of Swiss Pharma Nigeria, a local manufacturer, told OBG. “Expensive, name-brand drugs do not sell well here. Most firms subsist largely on low-cost OTC products.” Growth in the pharmaceuticals segment is currently being driven by the government, which has worked to expand its immunisation and treatment programmes in recent years, and by global NGOs and private funds, such as the WHO, the Clinton Foundation and the Gates Foundation.
ENCOURAGING GROWTH: The government has instituted a number of new initiatives in recent years to encourage the development of the pharmaceuticals industry. Under the National Guidelines on Drug Distribution (NGDD), which were introduced in early February 2013, NAFDAC aims to replace the numerous independent drug markets currently in operation with a network of state and federal drug distribution centres, which are expected to be set up under public-private partnerships (PPPs). “There are tremendous investment opportunities in the distribution chain under the NGDD. Distribution specialists from South Africa and the rest of the continent will be looking to expand their business to the Nigerian market. Furthermore, local distributors will be exploring options to scale up their operations to fill the need in the market,” said Lekan Asuni, managing director at GlaxoSmithKline in Nigeria. Sector leaders see these new PPP developments as having significant potential to increase overall access to health care. “A PPP is a blessing to the provision of health care because it makes services available and affordable to the public, and thankfully this form of health care is gathering momentum in Nigeria,” Dr Abiodun Fatade, the consultant radiologist and managing director at Crestview Radiology in Lagos, told OBG.
FIGHTING COUNTERFEITS: NAFDAC is also working to fight the distribution of counterfeit drugs, which are widely estimated to account for as much as 30% of total market share in some areas. The organisation has rolled out a new programme that allows firms to digitally track their products via mobile phone, thereby ensuring that they reach their final destination.
“NAFDAC’s e-pharma initiative offers significant benefits to consumers in affirming the quality of a drug sold on the market,” said Gursharan Singh, country manager at Ranbaxy Laboratories. “The initiative is also of significant benefit to manufacturers, who will have better information on the market for their products.”
OUTLOOK: Nigeria faces a substantial number of health-related challenges in the coming years. Long-term hurdles include the perennially low level of government support; the lack of access – both financially and, for much of the rural population, geographically – to basic health services; and the high costs associated with the manufacture and distribution of pharmaceuticals. Many of these issues are expected to be addressed in the federal government’s ongoing development initiatives.
At the same time, there are a substantial number of opportunities for private sector investment. “The health conditions of people in West Africa call for new product development. Even for those illnesses and diseases that also afflict people in other parts of the world, the way that health condition is treated may vary with people in this region. Certain drugs will be less effective in one population than another,” said Emmanuel Ekunno, the CEO of Neimeth International Pharmaceuticals, a local firm. Indeed, the increased involvement of the private sector could have a transformative impact on the sector. “The government has made progress in recent years, but we need the private sector to drive demand for more health services,” Arowolo told OBG.
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