Amidst the growing calls for adequate funding of healthcare in Nigeria, and for states to take on more funding responsibility, a wide gap appears in the state government’s budget for healthcare and the amount they release for implementation. For three years, between 2021 and 2023, three states in focus: Abia, Imo, and Enugu, failed to release the entire amounts they budgeted for healthcare, signaling the governments’ lack of accountability.
To unravel underlying patterns in budget implementation, this reporter collated and analyzed the budget performance data of the three states from 2021 to 2023.
Governors of the southeastern states after a meeting at the Government House, Enugu, on August 10, 2023
Huge budgets, poor performance
Imo State is one of the five states in southeast Nigeria. Over the years, it has had serious issues bordering on dilapidated healthcare facilities and poorlymotivatedpersonnel. Hence, the state has been in dire need of funds to scale health infrastructure and motivate personnel. But data has revealed that the state, as well as Abia and Enugu states, has performed woefully in releasing the funds it budgets for health.
In 2021, Imo State allocated N20 billion to health under the tagline of the Ministry of Health. Half of this amount, N10 billion, was designated as personnel costs, while N7.2 billion was allocated for capital development. The government also allocated N2.1 billion as overhead costs, while the remaining N651 million was dumped under “other expenditures.”
In the same year, the Abia State government allocated N12.4 billion to healthcare in the state. Earmarking N6.2 billion to capital development, N5.8 billion to personnel costs and N442.8 million to overhead costs.
In Enugu the same year, the state government allocated N15.2 billion for healthcare, with capital development receiving a larger share N7.5 billion, while personnel costs got N6.8 billion and overhead 748.9 million.
One thing is prominent among the three states: the allotment of huge amounts to personnel and overhead costs, which both fall under recurrent expenditure, while capital expenditure lags behind.
In 2022, there was a significant reduction of the healthcare budget in Imo State: it fell from N20 billion in 2021 to N17.9 billion in 2022 (about N3 billion was wiped off). This affected all parameters in the budget: N8.3 billion was allocated for personnel, N6.7 billion to capital expenditure, and N2.1 billion to overhead cost. The remaining 748 million was dumped under “other expenditures”.
In Abia, there was an improvement. The 2022 healthcare budget was N14.1 billion, nearly N2 billion more than 2021’s. This improvement was reflected across the board: personnel got N6.9 billion, capital got N6.6 billion, and overhead got N472.2 million.
2021 healthcare budget budgets of Abia, Imo and Enugu states
Enugu State took the same path as Abia. In 2022, its total healthcare budget was N19.4 billion, up from N15.2 billion in 2021. N6.1 billion was allocated to personnel costs, while capital expenditure got a big boost from N7.5 billion in 2021 to N12.8 billion in 2022. Overhead was N511 million.
2023 witnessed a significant decrease across the three states. Imo State allocated N11.8 billion, down from N17.9 billion in 2022 and N20 billion in 2021. Personnel costs was allocated N418.9 million, while the budget for capital expenditure was significantly higher at N8.9 billion.
Overhead was N2.5 billion. Abia State budgeted N9.8 billion and allocated N5.3 billion of that amount to personnel costs and N4 billion to capital development. N427.3 million was allocated to overhead. Enugu State budgeted N11.4 billion and allocated N7.4 billion to personnel costs and N2.8 billion to capital development. The overhead cost was allocated N1.1 billion.
Unfathomable releases
Over the years, advocates for healthcare funding, like the Prevent Epidemics Nigeria Project of the Nigeria Health Watch, have championed the need for adequate healthcare funding, at least to meet the Abuja Declaration, which advocates for the allocation of not less than 15% of the annual budgets of African countries. While there has been some remarkable progress, more attention has yet to be paid to budget accountability, especially at the state level.
Data provided by the various state governments and the analysis by this reporter show that none of the three states released all of the amounts they budgeted for healthcare between 2021 and 2023.
Analysis of the 2021 healthcare budget of Imo State shows that less than half (N8.7 billion), or 43.5%, of the N20 billion allocated was released, leaving a balance of N11.3 billion. The next year, the budget performance worsened. Only N6 billion (33.7%) of the budgeted N17.9 billion was released and a balance of N11.9 billion was left.
2022 healthcare budget budgets of Abia, Imo and Enugu states
In 2023, the year the governor of the state, Hope Uzodinma, was re-elected, it got worse: N3.75 billion, or 31.6% of the budgeted amount (N11.88 billion), was released.
Over the three years, there was a very significant pattern: a decline in both the amount allocated to healthcare and the amount released to be spent. The budget moved from N20 billion to N17.9 billion and N11.88 billion, while the release percentages declined from 43.5% to 33.7% and 31.6% in 2021, 2022, and 2023, respectively.
In Abia State, there was also a decline but it paused in 2023. In 2021, only N4.1billion, or 33.2% of the budgeted N12.4 billion, was released for implementation. This left a huge balance of N8.3 billion unreleased. In 2022, it got worse: N3.6 billion, or 25.8% of the budgeted N14.1 billion, was released. A balance of N10.4 billion was left unreleased. 2023 was a bit different: 42.5% or N4.1 billion, of the budgeted N9.8 billion was released and a balance of N5.6 billion was left. While 2023 was a bit different, the amount released remained the same as in 2021.
Enugu State was the best performer in terms of releases among the three states. In 2021, the state released N7.9 billion, or 52.5% of the budgeted N15.2 billion, and a balance of N7.2 billion was left. The next year, it released N10.3 billion or 53.4% of the N19.4 billion it budgeted for healthcare, and left an unreleased balance of a little above N9 billion. In 2023, it got better: N9.2 billion (80.6%) of the budgeted N11.4 billion was released and only N2.2 billion was left unreleased.
The trajectory of progress established is easy to spot: the releases increased from 52.5% to 53.4% and 80.6% in 2021, 2022, and 2023, respectively. The near-double increase in 2023 was despite the fact that the year had the least budgeted sum of the three years.
Recurrent Trumps Capital Expenditure
In budgeting terms, there are recurrent and capital expenditures. Recurrent expenditure encapsulates expenses under personnel and overhead costs, while capital expenditure holds the cost of capital development like building and renovation of facilities. One of Nigeria’s health sector’s banes is the willful negligence of healthcare infrastructure development. Government, both at the national and sub-national levels, votes more funds for recurrent expenditures and releases more for it than for capital development.
In Imo State’s 2021 personnel costs budget of N10 billion, N5.9 billion or 59.0% was released, and a balance of N4.1 billion was unreleased. Of the overhead costs budget of N2.1 billion, N739.7 million or 34.2%, was released. For the capital expenditure budget of N7.2 billion, only N1.9 billion or 27.2% was released. In 2022, of the N8.3 billion personnel costs budget, N3.89 billion or 46.9%, was released, while N136.1 million or 6.4%, of the overhead costs budget of 2.1 billion was released. Of the capital expenditure’s N6.7 billion, N1.9 billion or 28.5%, was released.
The next year, of the N418.9 million budgeted for personnel costs, 2.4 billion was released. This means the state overshot its budget by N1.9 billion — a 573.8% performance. Overhead was N2.5 billion, but N371 million or 14.7% was released. Despite budgeting the highest amount to capital budget, it received the lowest percentage of releases: N8.9 billion was budgeted but only N984 million or 11.0%, was released.
Further analysis shows that from 2021 to 2023, the Imo State government could not release the entire capital expenditure it budgeted for 2021 alone. In fact, after capital releases for the three years, there was still over N2 billion in balance from the 2021 budget. This means the capital development in the sector that was billed to take place in 2021 alone did not entirely take place, not just in that year, but in the next two years.
For Abia State, the story is not different. In 2021, the state government budgeted N5.8 billion for personnel costs and N3.9 billion or 68.4%, was released. The overhead was N442.8 million but N8.6 million or 1.9%, was released. For recurrent, N6.2 billion was budgeted, but only 2.4% of the amount or N151.8 million, was released. The next year, the recurrent was N6.9 billion, and N2.3 billion (34.0%) was released. Overhead was N472.2 million and N17.2 million or 3.7%, was released. For capital, N6.6 billion was budgeted but 18.8% of the amount, or N1.2 billion, was released.
In 2023, the personnel costs budget was N5.3 billion, and 51.2% or N2.7 billion, was released. Overhead was N427.3 million and N67.7 million or 15.8%, was released. The capital was N4 billion but 1.3 billion or 33.9%, was released.
Analysis shows that from 2021 to 2021, capital releases were consistently below personnel releases. Additionally, the health capital expenditure releases from 2021 to 2023 were not up to half of the capital expenditure budgeted for 2021 alone.
The pattern in Enugu was more disturbing. The state consistently overshot its personnel costs budget while releasing negligible amounts for capital development. In 2021, the state budgeted N6.8 billion for personnel costs but ended up releasing N7.3 billion or 106.6% of the amount. This shows that it overshot its budget by N454.8 million. Overhead was N748.9 million and N41.4 million (5.5%) was released. The capital budget was N7.5 billion but a negligible 8.2% or N621.8 million, was released.
In 2022, N6.1 billion was budgeted for personnel costs; again, the state overshot its budget and released N7.7 billion, or 125.3% –– N1.55 billion more than the budgeted sum. Overhead was N511 million; again, it overshot the budget and released N747.4 million or 146.3% –– N236.3 million more. For capital, the budget was N12.8 billion but only N1.9 billion or 15.1%, was released.
For 2023, the personnel was N7.4 billion. The state overshot the budget again and released N8.2 billion or 111.6% –– N864.3 million more. Overhead surged to N1.1 billion and N814.3 million (68.5%) was released. Capital performed worst again: N2.8 billion was budgeted but only 4.1% or 114.3 million, was released.
The health capital budget performance of Enugu State between 2021 and 2023 was the worst among the three states analyzed. Some patterns were obvious: at no year during the period did capital releases equate to or surpass personnel costs releases. Also, the state consistently overshot the personnel costs budget for the three years and never released up to 16% of capital budgets for all of the years.
2023 healthcare budget budgets of Abia, Imo and Enugu states
In fact, the combined releases from 2021 to 2023 were never up to a fourth or 25%, of the capital budget for 2022 alone.
‘Budget performance shows intentions of the government’
The patterns discovered in the budgets of all three states are disturbing. Iniobong Usen, Head, Research and Policy Advisory, BudgIT, says such patterns show poor budgetary planning and express the intentions of the government.
“Budgets are predicated on certain fundamentals and parameters. A number of things affect the credibility and reliability of the budget,” Usen said in a telephone interview. “Are the fundamentals right? Does the government have the ability to raise what it says it will raise and does it have the credibility to borrow the amount it says it wants to borrow?”
Beyond the ability to fund the budgets, he explained that the performance and patterns clearly show the preferences of the government. “Anything the government considers of utmost priority, even if it does not have money to spend, it will look for money,” he says.
“Instead of investing in projects that have more far-reaching impacts on the lives of the bulk of the citizens, they want to go for huge, sometimes white elephant, projects that are capital intensive but will have little or no impact on the lives of the bulk of the citizens,” Usen explains.
According to him, some state governments would rather not focus on little but very impactful projects like building and equipping primary health centers, which would be hard for them to lay claim to. “If they invest in hospitals and people are able to get quality care from those hospitals, it’s not tangible and they can’t possibly claim that those people are not sick and that is part of their investment in healthcare.”
“They want to build some roads (that are hardly used), airports, and worship centers. And those are capital-intensive projects that crowd out needed investment in a critical area like health.”
