Industry Trend Analysis - Underfunded Health Sector To Limit Market Growth Potential - JAN 2018

BMI View : Nigeria's healthcare sector will continue to suffer as insufficient government funding prevents any significant improvements to healthcare-related outcomes. While opportunities for drugmakers will continue to be stimulated by the size and wealth of the market, the proposed healthcare budget for 2018 is indicative of the lasting effects from the oil price collapse and will ensure a challenging environment for healthcare providers and multinational drugmakers in Nigeria.

Nigeria's healthcare delivery will continue to suffer from insufficient government funding. The country's proposed national budget for 2018 includes a NGN340.5bn (USD945.7mn) allocation for the healthcare sector. Within this, NGN269.3bn (USD748.1mn) has been earmarked for recurrent expenditure and NGN71.1bn (USD197.5mn) for capital expenditure. This equates to about 3.9% of the overall spending allocation, budgeted at NGN8.6trn (USD23.9bn) - up 16% from 2017 at NGN7.4trn (USD20.5bn). While this corresponds to a slightly greater health budget than 2017 in value terms, the budgeted allocation corresponds to a smaller contribution than 2017 in percentage terms (4.2%). Moreover, the pace of budgeted expenditure for the healthcare sector has been relatively weak compared to Nigeria's national budget itself. Indeed, Nigeria's 2018 national budget has increased by nearly 92% since 2015, yet the healthcare budget has grown by a notably smaller 31%.

Failure To Meet Targets

Health Sector To Remain Underfunded
Nigeria: Budgeted Allocations For Healthcare (NGNbn)
f = forecast. Source: Nigeria Ministry of Finance, BMI

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