COVID-19 and the “Free Market Vs Welfarism” Debate in Nigeria’s Health System

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Esther Eshiet

The COVID -19 pandemic has spotlighted the tensions between the privatization of public services and the state’s obligation to provide said services. Nigeria, as an emerging economy, is a useful case study for considering a recalibration of the “Free Market Vs Welfarism” Debate. The paradigm shift comprises safeguarding access, affordability, quality, and inclusion in healthcare.

Introduction

Access to quality health services is crucial to the survival and well-being of communities in emerging countries. Over the years, in the Global South, the responsibility of service delivery has progressively shifted from the national governments to Non-Governmental Organizations (NGOs), foundations, and the private sector. This change of paradigm was accelerated in the 1980s by the Washington Consensus, which pushed for the implementation of Structural Adjustment Programs (SAP), the privatization of state-owned enterprises, and trade liberalization. Four decades on, the positive impact of the Washington Consensus on the health systems of emerging countries is questionable. In a typical emerging market like Nigeria, for instance, such privatization has resulted in a decline of public investment in healthcare—currently averaging 3.7% to 4% of the Federal Government (FG) budget, despite its commitment to the Abuja declaration.

The discussion about privatization policies echoes the classic “Free Market vs Welfarism” debate, cross-cutting philosophy and ethics, economics, and political science. But the debate becomes a lot more complicated when applied to healthcare, as states have a moral, political, and legal obligation to ensure access to health care of appropriate quality. ​This governance goal proves particularly challenging in countries with low-income settings, weak economies, high rates of poverty, and high dependency on foreign aid—issues all exacerbated by the novel COVID-19 pandemic.

The free market vs welfarism in Covid-19 times—a reset? Using the Nigerian case study enables the exploration of the potential channels of influence of the pandemic on the privatization/welfarization balance within the health systems of emerging countries. Nigeria is a classic example of an emerging economy, as a member of “the Next Eleven” with a 6.3% economic growth rate before the 2016 recession and COVID-19 pandemic.   

 

The State of the Nigerian Healthcare System

The Nigerian health system is organized into three levels of care: primary, secondary, and tertiary. These levels of care are administered and funded by local governments, states, and the FG respectively. Health infrastructure is largely concentrated in urban areas, with four times as much access to healthcare in cities than in rural areas. A 2014 survey reported around 3,534 hospitals in Nigeria, with only 26.8% (i.e., 950) belonging to the public sector, including 54 FG hospitals. The private sector is fragmented and varied with very limited hosting capacity, averaging just 11 beds per private hospital.

The 1986 SAP reforms in the health sector led to the introduction of user fees. The 1999 privatization policy handed operational licenses to private sector players, in the hope that this would improve access and quality of health care. However, this policy led to a privatized health care system with 70% private sector control, a doctor-to-patient ratio of 0.2 per 1000, and a health insurance system covering only 4% of the country’s 200 million population, with 90% of medical services paid out of pocket. Nigeria has also suffered from capital flight, with up to 50% of Nigerian doctors practicing abroad, and an annual revenue loss of $1 billion to medical tourism.

The recent emergence of the COVID-19 pandemic is spotlighting some of the vulnerabilities of the privatized healthcare model while re-interrogating the role of the public sector in the arbitration of the free-market vs welfarism debate.

 

 “The recent emergence of the COVID-19 pandemic is spotlighting some of the vulnerabilities of the privatized healthcare model while re-interrogating the role of the public sector in the arbitration of the free-market vs welfarism debate.”

 

Challenges and opportunities for the health system in Nigeria

The COVID-19 pandemic seems to be challenging Nigeria’s health care governance as well as unlocking opportunities for adaptability in several ways.

Nigeria has been able to tap on its previous experience with the Ebola epidemic to build its resilience by repurposing the infrastructure, equipment, personnel, and protocols for managing the COVID-19 pandemic. Following a World Health Organization assessment, the FG set up the Nigeria Centre for Diseases Control (NCDC), which established 29 laboratories, 22 operating centers for emergencies, and has trained over 400 epidemiologists across the country. The direct impact of this initiative was demonstrated by the country’s ability to detect the Lassa Fever outbreak and COVID-19 in 2020.

Furthermore, the global impact of the COVID-19 crisis led to a worldwide scarcity of Personal Protective Equipment (PPE). This was also felt in Nigeria, with frontline workers decrying the lack of PPE and even downing tools in protest. Unlike with previous epidemics such as Ebola, countries have been dependent on Overseas Development Assistance (ODA) for funding, technical assistance, and medical supplies. However, Nigeria‘s COVID-19 financing strategy was mostly driven by donations from private citizens and companies to the sum of $57,333,333.

Before COVID-19, the FG loosely implemented coordination of health service management across the three levels of care. The advent of the virus in Nigeria has seen the coordination task for the pandemic being re-centered by the FG. The NCDC equipped all COVID-19 centers and facilitated the retraining of personnel in hospitals and border control teams.

However, the main transition which has taken place with the response to the Covid-19 pandemic is the FG’s re-positioning of public health as a public good. Unlike non-Covid hospitalization needs, since the beginning of the pandemic COVID-19 patients have not been required to “buy cards” or pay for care—a reversal of a common practice whereby patients are required to purchase registration cards and make down payments. The testing, isolation, and treatment of COVID-19 related services have been provided by the government for free. This could be the start of a drive to recentralize health resources due to the severity of the virus and the high morbidity threat to the populace, or a political strategy of experimenting with welfarism on segments of the Nigerian health care system.

Conclusion

The advent of the COVID-19 pandemic has revived the global conversation about free-market vs welfarism. Far from being unique to Nigeria, this debate is currently reverberating across the world. Here are some recommendations for implementing a vaccination strategy. Firstly, the FG needs to engage the country’s National Youth Service Corps in a door-to-door vaccination drive. There is also a need for the democratization of vaccination centers across the country, crosscutting hospitals, health posts, pharmacies, NGOs, and religious institutions. The storage and distribution of vaccines, taking into account Nigeria’s electricity and logistics challenges, can be overcome by working with private sector players within the hospitality industry such as airlines, hotels, transport companies, and water production companies, as well as with cold storage establishments across the country. There is also an urgent need for vaccination documentation and tracking, to avoid wastages and unequal distribution.

The FG needs to use the lessons of the COVID-19 pandemic to concretely re-evaluate its approach to healthcare. Perhaps the case study of governments purchasing vaccines on behalf of their population is a direct example of how public-private partnerships in healthcare can counterbalance the predominance of the law of demand and supply concerning issues of access, quality, and affordability of care. It can also promote inclusion in healthcare and a reduction of inequality, especially for the most vulnerable members of the population.