Nigeria – Health – Privatisation instead of wages for health workers

David Hall
Date published: 
Jul 2010

With more than one million children dying every year from preventable diseases, Nigeria is one of the least successful of African countries in achieving improvements in child survival during the past four decades. A detailed study found that increased public spending on healthcare, and improved general literacy, were the most important factors for reducing child deaths.

Yet public expenditure only accounts for about a quarter of health spending in Nigeria. Nearly all the rest comes from direct payments by patients, to both public and private operators. This system hits the poor hardest: half of those who do not get healthcare are deterred by cost.

  • Fees were introduced into public health services in Nigeria in the late 1980s, with the objective of increasing income, but they have had damaging effects. In one district, the numbers of women dying in childbirth doubled after fees were introduced for maternal health services, and the number of babies delivered in hospitals declined by half.
  • People on higher incomes benefitted more from anti-malarial programmes because the poor were deterred by user fees.
  • Some states are now providing free services, but user fees are still in place for the general population and even for some services for the under fives and pregnant women.
  • Public clinics do not have adequate stocks of drugs and other treatments.

The service also suffers because staff are inadequately and unreliably paid. Public authorities still try to make savings by cutting the wages bill, which undermines services. At one teaching hospital, the number of medical, midwifery and nursing staff fell between the 1980s and the year 2000because of a freeze on recruitment of permanent staff, and the maternal mortality rate increased more than four times. Healthcare workers in Kaduna state had to go on strike for a week  in February 2010 in order to persuade the governor to include enough in the state budget to pay an agreed pay rise. Most primary healthcare clinics are understaffed compared with national guidelines, but a majority are women, and people rate the attitude of staff more highly than other aspects of the service they receive. However, many health workers do not receive adequate salaries, and payments are often delayed, so they resort to other work – including private healthcare or sale of medicines – to supplement their pay, resulting in overprescribing of drugs to boost private sales.

The private sector provides limited, poor and unequal healthcare. In the year up to April 2008, over 184 private hospitals, clinics, and laboratories were closed in Abuja, Nigeria’s capital city, for failing to meet basic standards of hygiene and staff training. Private clinics and shops are responsible for the great majority of sub-standard and counterfeit drugs.

The World Bank has increased its lending to healthcare, but continues to promote privatisation and commercialisation in healthcare in developing countries, including fees and insurance for financing, rather than increasing free public healthcare through tax-financed public spending. This has not been effective: even the Bank’s own evaluation division reported in 2009 that only 25% of the bank’s work in sub-Saharan Africa was satisfactory. The policy is driven by the International Finance Corporation (IFC), the arm of the World Bank dedicated to investing public money in private companies: in Nigeria, for example, the IFC has made a series of multi-million dollar  investments in Hygeia, a private healthcare company set up by USA investors to provide healthcare services to large corporate clients. The IFC promotes these policies in a policy document in January 2010, titled ‘The Business of Health’, which claims that governments should embrace the private sector thorugh more PPPs, which it describes as a ‘win-win arrangement’ The country assistance strategy of the international financial institutions (IFIs) and donors for Nigeria states that “reforms will need to include expansion of the role of the private sector....utilize the potential of PPPs….. and provide Nigerians with easy access to health insurance”.

The IFC, the African Development Bank, the German development bank KfW, and the Gates Foundation have created a Health in Africa Fund, dedicated to making commercial investments in private healthcare companies. Over £50 million of public money is already invested in it, but this is a private equity fund, run by Aureos Capital, which operates out of the tax haven of Mauritius and takes 2.25% of all investments every year as ‘management fees’ – high even by the standards of private equity firms. Aureos see themselves as competing against “non-profit organizations who subsidize health care services and distort market forces”. The fund was strongly criticised in the Who bulletin in October 2009 by staff at Save the Children, who pointed out that there was no public debate about the fund before it was set up, that there is no empirical evidence to support the encouragement of the private sector, and that there is clear evidence that the poor get a worse deal from the private sector.

Sources and further reading