Health-Care, Oop Health Expenditure and Poverty of Households in Nigeria: Assessing the Linkages

Abstract

Out-of-pocket (OOP) payments for healthcare, the predominant form of private health financing, make up approximately 74.68% of the total healthcare funding in Nigeria, a figure higher than that of other subSaharan countries with lower GDPs. On the other hand, of the 14.97% government allocated to Nigeria’s general health expenditure as of 2020, 82.7% was spent on salaries, wages and running offices, 
while only 10.9% was spent on the repairs and construction of the health care facilities, provision of drugs, and medical equipment across the health care facilities. These difficulties make individuals pay heavily for 
their healthcare; further causes a huge difference in the quality of healthcare services they receive as well as create income disparities between the poor and the rich. These snags hold profound implications 
in the accessibility, affordability and overall effectiveness of healthcare services and the reality of horizontal inequity putting pressure on lowincome earners thereby exacerbating poverty and lower per capita 
income, amongst other changes. These other changes such as change in the position of individuals on the income distribution strata due to health care payments referred to as income reranking and the issue of 
individuals with different abilities to pay not being treated fairly creates economic implications referred to as vertical inequity. Consequently, in Nigeria – one of the most income unequal countries in the world, the 
poor people spend nine times more on health services than the wealthy. The solution to this problem may lie in the payment of income tax recommended in this study titled Health-care, OOP health expenditure 
and poverty of households in Nigeria: accessing the linkages.