Healthcare Financing: The Chances For Community Based Health Insurance In Nigeria

The state of the Nigerian healthcare industry has been a major concern over the years and the recent COVID19 pandemic has further triggered calls for reforms in the industry. One of the industry’s major challenges is how healthcare is financed.

Nigeria, having a population of about 200 million people (2019 statistics), budgeted N365.77 billion for healthcare in 2019 (N1,800 i.e. $5 per Nigerian), which was drastically below the WHO recommendation of $34–$40 per person as the acceptable minimum required to provide a population with basic health care.  

Image Source: Nairametrics

According to the NOI polls, only 9% of Nigerians have any form of health insurance and this includes registrants under the NHIS scheme and those registered with Health Maintenance Organizations. As a result, out-of-pocket payment is the principal means of healthcare financing with 69% of healthcare payments made out of pocket by a predominantly poor population.

The lack of suitable healthcare financing has greatly affected access to basic healthcare in Nigeria. With over 50% of the Nigerian population living below poverty level, basic healthcare is a luxury that many Nigerians cannot afford. Curative care, which is what classifies almost 95% of healthcare in Nigeria, is mostly unplanned for; as a result, a large number of Nigerians cannot afford their medical bills out of pocket. It has therefore become imperative that we find alternative means of financing healthcare in Nigeria.

Healthcare financing in most African countries, particularly sub-Saharan Africa, is the poorest in the world. In spite of foreign grants and aids, very few African countries have been able to meet the WHO’s minimum requirement for spending on basic healthcare. However, some countries achieved some notable strides in attaining universal health coverage as a result of their healthcare financing models. Rwanda is one of such countries.

The unique demographics of Nigeria makes it impossible to completely duplicate the Rwanda model, however, there are a few things Nigeria can learn from it.


Rwanda is a small country in East Africa with a population of about 13million people, 82% of the population being rural dwellers. In 1999, the Rwandan government initiated the Community Based Health Insurance (CBHI) Scheme as a response to the prevalent inability of Rwandans to pay their medical bills. The CBHI Scheme has been largely successful with about 96% of Rwandans registered under the scheme.

At the advent of the Rwandan CBHI scheme, a fixed uniform premium was applicable to all households regardless of their financial standing. The scheme relied greatly on government subsidies. In order to ensure that every class of Rwandans would benefit from the scheme, and reduce the financial burden on the government, premium structures based on the economic categories of households was introduced so that wealthier households paid higher than poorer households. Members of the scheme are divided into three categories as follows:

  Category 1 Category 2 Category 3
Economic Class Poor Group Middle class Group Upper class Group
% of members 27% 70% 3%
Premium per year $2.99 $4.35 $10.34
Payable by Government The Member The Member

In addition, the Rwandan government made health insurance mandatory to encourage more people to register on the scheme. The survey carried out by the University of Rwanda, in conjunction with Management Sciences for Health indicated that all categories of members agreed that the CBHI scheme made healthcare more affordable and accessible for them.


Two major differences between the demographics of Rwanda and Nigeria are their population size and the socio-economic conditions of their populations.

Majority of Rwanda’s population belong to the middle class and as such, can afford to pay their premium. On the other hand, Nigeria has a population of predominantly poor people. According to the survey carried out by IPSOS in 2018/19 in accordance with the African Development Bank definition criteria, 60% of Nigeria’s population live below the poverty line; 20% belong to the floating class, 14% belong to the middle class and 6% are members of the upper class.

As can be seen from the table above, the Rwandan government pays the premium of the poor population in full. 66% of the Scheme’s revenue is gotten from member premiums, most of which is raised from middle class members. With a middle and upper class of only 14% as obtains in Nigeria, this model would pose a serious burden on the government and would be at great risk of being underfunded.

The socio-economic dynamics of the Nigerian population poses a major hindrance to the success of community-based health insurance in Nigeria; nevertheless, it can be pivoted to suit the Nigerian clime. Here are a few steps that can be taken to begin the journey to reforming the means of healthcare financing in Nigeria through community-based health insurance;

  1. Introduction of a Community Based Health Insurance Scheme for basic healthcare in some regions:

Although Nigeria as a whole is not ready for community-based health insurance, the CBHI scheme is scalable in Eastern Nigeria which has similar demographics with Rwanda. Introducing the Nigerian model of CBHI in Eastern Nigeria through the local governments will be a step in the right direction.

  • Introduction of structures for the education of the public on preventive care, with emphasis on health insurance.
  • Solidification of Primary Health Care institutions which should be the primary health provider under the scheme.


Nigeria is yet to make any progress in achieving universal health coverage as access to basic healthcare is still a challenge to majority of Nigerians. This necessitates the need to take steps towards improving the means of healthcare financing in Nigeria. Introducing community-based health insurance in parts of the country where it is scalable will be a very significant move towards achieving universal health coverage in Nigeria.


  1. ResearchGate – Out-of-Pocket Payment in Nigeria.
  2. NOIPolls – Health Insurance Coverage for Nigerians still Abysmal, An Urgent Call for New Strategy.
  3. University of Rwanda – The Development of Community-Based Health Insurance in Rwanda: Experiences and Lessons.
  4. IFC – The Business of Health in Africa.
  5. IPSOS – Unmasking the Naija Lifestyle