THE 2018 BUDGET AND THE NIGERIA HEALTH SECTOR
The diagram above is a break down of the 2018 budget with a particular focus on the health sector.
The above break down of the 2018 budget though concise paints a clear picture of how the Federal Government plans to allocate funds to various in-country priorities in order to catalyze growth within the country. The 2018 budget referred to as the “budget to budget of consolidation” aims to consolidate on the Economic Recovery and Growth plan.
Although the minister of Budget and National Planning has given insight as to how the funds to support 2018 will be generated, concerns still remain around how the Federal Government plans to finance a budget of 9.1 trillion. The minister has stated the budget will be financed through a combination of internal sources of Revenue in form of fines, levies and sale of assets as shown below
- N99 Trillion from oil revenue,
- N25 Billion from the dividend to be received from the Nigerian LNG Limited,
- N17 Billion from minerals and mining revenue.
- N55 Billion from Companies Income Tax,
- N51 Billion from Value Added Tax,
- N86 Billion from Customs duties,
- N87 Billion from Federation Account levies
- N95 Billion from independent revenue from its agencies,
- N84 Billion from tax amnesty income,
- N3 Billion from signature bonus
- N250 Billion from unspent balance from previous years.
- N374 Billion from domestic recoveries and fines,
- N44 Billion from Federal Government recoveries.
- N710 Billion from the sale of oil assets,
- N92 Billion from grants and donor funding would contribute.
- N64 Billion from other unnamed revenue sources,
- N95 Trillion would be financed through borrowing of N1.64 Trillion. (N1.64 Trillion borrowing is made up of domestic of borrowing of N793 Billion and foreign debts of N849 Billion).
- N306 Billion from privatization proceeds
- N5 Billion from the sale of other government property to partly finance the deficit.
Although the above appears well thought out and carefully planned the revenue generation from the listed sources appear ambitious and overly optimistic. Debt servicing remains at a record high yet the budget still relies on borrowing to adequately finance it.
Another issue of concern is the fact that the Federal Government has announced that it will soon release a supplementary budget including further adjustments to the already signed budget. One implication of this announcement is increased pressure on already strained sources of revenue.
The Federal Government plans to spend a total of N356,450,966,085 on the health sector in 2018. The sum of N269,965,117,887 will be spent on non-debt recurrent expenditures such as salaries and wages, leaving N86,485,848,198 for capital expenditures. In addition, the Federal Government included the funding for the BHCPF (HUWE) in the 2018 budget which amounted to N55,150,000,000. The implication of the above is that in 2018 the Federal Government Plans to spend a total of N436.69 on healthcare per individual (Using National Population Commission’s current population estimate of N198 million). This figure increases slightly to N715.33 when the BHCPF funding is added. With National Population Commission’s growth forecast of urban areas at around 6.5 % we can expect this estimate to drop further in coming months. Taking into consideration basic health needs required by an individual over the course of a whole year, the above amount is largely insufficient.
A major focus of the Honorable Minister of health is to put the Nation on the right path towards achieving Universal Health Coverage. In order to do this, primary health care within the country needs to be revitalized and further strengthened. These interventions require increased technical support and funding. Current financial provisions present will only be able to support a pilot of the PHC revitalization and improved access across 3 states. Nigeria has 36 +1 states if any major milestones are to be recorded, funding for the Health sector needs to be increased to a minimum of 15% of the budget as agreed in the Abuja Declaration of 2001.
Bamidele Odusote is a Business Analyst at ACIOE Associates where she leads Health Sector engagements with multiple clients and stakeholders.
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