Beyond insurance numbers: Why Nigeria’s health financing model continues to fail financial protection

Abstract

Financial protection is a core pillar of universal health coverage and is explicitly captured under Sustainable Development Goal (SDG) 3.8.2. Yet Nigeria remains one of the poorest-performing countries globally on this indicator, despite over two decades of health financing reforms. Less than 5% of the population is covered by any form of health insurance, while out-of-pocket payments account for more than two-thirds of total health expenditure. Consequently, between one-quarter and one-third of Nigerian households experience catastrophic health expenditure annually, with the burden disproportionately borne by the poorest quintiles. This perspective aims to critically examine the structural determinants of Nigeria’s financial protection crisis, spanning revenue generation, risk pooling, benefit design, and governance, and to propose evidence-based reform pathways grounded in secondary literature and regional policy lessons. Drawing on national data, global benchmarks, and comparative experiences from peer African countries, including Rwanda, Ghana, Ethiopia, and Kenya, it argues that fragmented, voluntary, and underfunded insurance schemes cannot deliver financial protection in a predominantly informal economy. A shift toward tax-funded, unified pooling with explicit protection for primary care, chronic diseases, and catastrophic illness is presented as the most viable pathway to achieving SDG 3.8.2 and restoring public trust in Nigeria’s health system.

Keywords

Financial protection / Catastrophic health expenditure / Universal health coverage / Health financing / Nigeria / SDG 3.8.2 / Out-of-pocket payments / Health insurance

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