All the five continents and 25 countries I’ve lived in have one thing in common: people always ask me about Afrobeats music, or Nollywood movies. Even Bill Gates, who visited Nigeria recently, says how much his daughter loves Burna Boy and Rema. Nigeria’s global reckoning is framed around crude oil, but our music industry generates a staggering 10 percent of global revenue in recorded music, while the Nigerian diaspora is worth over 30 billion dollars in annual remittances.

Bill Gates should be visiting for ideas and investment.

Instead, he came to “advise the Nigerian government, citing poor investment in the health sector as a challenge limiting the potential of many Nigerians.”

Now, at my age, I have no tolerance, for being told what my priorities should be. I feel it is time also, to limit Nigeria’s dependency. Whatever foreign aid gives with the right hand, it will take with the left. Before I explain how, here’s a little story.

More Money, More Problems.

Once upon a time, in April 2001, Nigeria played host to the most ambitious health financing agenda in a half century.

Not since the World Health Organization’s Alma-Ata Declaration of health for all in 1978, had so many African leaders gathered to take action.

Urgency was needed for a good reason: Africa is home to 16 percent of the world population but carries nearly 25 percent of the total global disease burden, with access to only three percent of health workers and less than 1 percent of global financial resources.

The commitment by African heads of state and government, to allocate at least 15 percent of their national budgets to health financing, is known as the Abuja Declaration.

In all that time, Nigeria has grown to become Africa’s largest economy, yet Nigeria’s health budget is still under four percent. In fact, more than 20 years after the Abuja Declaration, 19 African coun- tries have actually reduced their health budgets.

One reason why, is that, for every $1 in aid a developing country receives, over $25 is spent on debt repayment.

When national GDP rises, as in Nigeria, but GDP per capita remains low, the health sector remains severely underfunded.

The tight relation between GDP per capita and healthcare expenditures is the first law of health economics.

Why doesn’t the influx of donor money for health raise health expenditure?

Well, the incentive to contribute to the health sector reduces, donor money substitutes for existing local public expenditures, and even ‘crowds out’ local private funds. This is the third law of health economics.

What’s the end result? Out-of- pocket payments, which push people into poverty. This is the second law of health economics. It’s why foreign aid deepens dependency.

The case for efficiency gains. Nigeria’s new government has shown commitment against wastage by ending fuel subsidy. It can save nearly 4 billion dollars per year, which can be reinvested in health and education. The same political will is needed across many other non-oil sectors, to safeguard policy instruments such as Nigeria’s National Health Act (2014), which requires one percent of the country’s consolidated revenue fund to be dedicated to health.

Political will can also scale up the National Health Insurance Scheme (NHIS), to create a revenue loop in the health sector, so that money that is being spent keeps coming back in.

In 2008, while supporting Rwanda’s Ministry of Health on developing a National Policy, it struck me that when it came to official government business, there was only one bank in Kigali authorized to receive tellers or to cash government cheques.

Rwanda operates a public accounting system whereby all government receipt, revenue and income, without exception, are collected into one single account. Their central bank directly controls the designated bank account, and absolutely no intermediary banks or any third-party accounts are per- mitted.

Nigeria has also implemented a Treasury Single Account (TSA) with limited success.

In its first phase alone, while 50 ministries, departments and agencies (MDAs) were found to have failed to remit operating surpluses totalling ₦2.75trillion, Nigeria’s TSA resulted in brand new savings of about ₦500 billion from 217 participating MDAs.

One of the reasons I have faith in Nigeria’s ability to generate our own funding for health, is that I’ve seen us do it before.

The success of public procurement laws a.k.a. due process, TSA and other fiscal oversight policies highlight how much revenue government could redirect to fund the health sector, where the cost of wastage is not only money, but also human lives.

One untapped but significant source of domestic funding for health is the private corporate sector. As an example, multinational companies operating in Nigeria are entitled to tax incentives worth an estimated $2.9 billion a year.

That amount, if saved, could close the domestic health- financing gap three times over. Another untapped source of domestic funding for health is diaspora remittances.

Nigeria earned $168bn in eight years, exceeding receipts from oil, foreign aid or the national budget. Remittances are already likely to be used to pay the medical bills of sick relatives. Taxing will invest remittances in strengthening the health system.

How can we transition away from foreign aid?

In the closing chapters of Global Health in Practice (2022), Dr. Olusoji Adeyi makes stepwise recommendations for pivoting away from foreign aid for health.

We can immediately accept full financial responsibility for essential medicines and basic health services. We can refocus foreign aid toward more complex strategic reforms.

Refocused technical assistance can scale up our research networks, think tanks, insurance systems, disease surveillance, manufacturing technology, and an integrated network of hospital systems.

By 2030, the Nigerian health sector should be locally financed, in line with global consensus on sustainable development.

We’ve achieved it with Burna Boy or Rema. Imagine the multiplier effect, when several Nigerian entrepreneurs become world class logisticians and local manufacturers of basic health goods.

Conclusion

Through consolidated revenue systems like the TSA, more private sector led funding, gains in tax efficiency, and a full scale and compulsory NHIS, we can eradicate Out-of- Pocket spending on health, and end our dependence on foreign aid for basic health services, in the shortest time.

Dr. Ayo Adene is a Health Financing specialist with 20 years multi partner experience from over 20 countries in Strategic Communications for Health Systems Strengthening. He writes from the Netherlands. His clients have included the World Bank, Global Fund, the United Nations and the Governments of Rwanda, Suriname and the Netherlands. He can be reached on Twitter, LinkedIn and +2348161856363.