Macroeconomic outcomes of healthcare financing reforms in Nigeria : a computable general equilibrium analysis

Abstract

Since Nigeria's independence, concerted efforts have been made to fortify the healthcare system, aiming to safeguard millions of lives through enhanced primary, secondary, and tertiary healthcare services, and to progress towards universal healthcare coverage, as envisaged by the National Health Act (NHA). Despite the successful adoption of numerous initiatives, they have encountered substantial challenges in implementation and sustainability, influenced by factors such as importation dynamics, price fluctuations from both private and public sources, the impact of subsidy removal, and taxation policies. This study investigates the macroeconomic consequences of potential healthcare financing reforms in Nigeria, particularly focusing on aspects of pricing, taxation, and the import-export balance. Utilizing a Computable general equilibrium (CGE) approach, this analysis draws upon the 2011 Nigeria Input-Output Table to construct a Social Accounting Matrix (SAM). The data is subsequently integrated into the GAMS software, as detailed in the appendix. Findings indicate a disparity between domestic healthcare demand and supply, potentially inciting increased healthcare importation. Crucially, it is observed that escalated taxation on corporations and households exacerbates healthcare accessibility challenges, primarily due to diminished affordability. This research underscores the imperative of recalibrating healthcare financing strategies to mitigate inequalities and enhance service availability, thereby fostering a more robust healthcare system in Nigeria.