HEALTH CARE COST OF LIVING AND ITS EFFECT ON THE NIGERIAN ECONOMY
CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
An effective health care is a basic and inevitable human need. According to the World Health Organization (WHO, 2005), fifty percent of
economic growth differentials between developed and developing nation is attributable to ill-health and low life expectancy. Developed
countries spend a high proportion of their Gross Domestic Product (GDP) on Health Care because they believe that their resident health can
serve as a major driver for economic activities and development. To this end, Governments in Nigeria, over the years have been making
frantic efforts at ensuring that there is an increase in the level of public expenditure on health. In 1970, recurrent expenditure on health was
N12.48 million. This figure rose astronomically to N52.78 million and N132.02 million in 1980 and 1985 respectively. This trend continues as
the expenditure rose steadily form 575.3 million in 1989 to N68.20 millions 1991 and further to 72290.07 million and 98.200 million in 2007
and 2008 respectively. The aforementioned scenario clearly underscores the fact that health care expenditure in Nigeria has been on the
increase over the years. However, in spite of all these increase, much impact has not been made in the area of reduction of infant, under five
and maternal mortalities since 1970. For instance, the Nigeria’s rate of infant mortality (91 per 1000 live births) is among the highest in the
world, and the immunization coverage has dropped below thirty percent while the mortality rate for children under age five is 192 deaths
per one thousand. By year 2007, it was reported that more than one hundred and thirty four thousand women died from pregnancy
complications. In addition, the life expectancy ratio on the average has been on the decline over the study period. It should however be
noted that despite the increase in government expenditure in health care in Nigeria, the contribution of this to health is still marginally low
whereas the extent and magnitude of its impact on economic growth is undetermined .
The relationship between human capital and economic growth has received generous enquiries in the literature .The significance of Human
capital in achieving sustainable economic Growth has been documented. Growth theories suggest the role of human capital in achieving
significant growth in the economy. The economic view of human capital encompasses education, health, training, migration, and other
investments that enhance an individual’s productivity. Outcome from several studies seem to suggest that there is a positive correlation
between health status and sustainable economic growth. The wide acceptance of this nexus prompted the prominence of health outcome
in the Millennium Development Goals (MDGs). In fact three of the goals are health specific while the others can also be regarded as health
enhancing. Thus, the development of human capital becomes more important in many resource constraint countries like Nigeria. The
opportunity costs of spending on health is very high and thus the need for a justification on the increase or otherwise of health spending in
Nigeria. Incidentally, Nigeria is among the developing nations with poor health outcomes and its attendant problems. The health status of
Nigeria is still considerably low and exists below that of some countries in West Africa. Low life expectancy at birth, high infant and maternal
mortality rates, malaria and tuberculosis alictions are some of the characteristics features of the Nigeria`s health status. Life expectancy at
birth in Nigeria was estimated at only 48 in 2007, compared with 56 in Ghana. This is complemented by the high numbers of women who die
of complications during pregnancy or childbirth. Although the global maternal mortality ratio of below 400 maternal deaths per 100 000 live
births in 2008, the maternal mortality ratio for Nigeria was 1100 per 100 000 live births, still on the high when compared to 560 and 910 in
Ghana and Guinea respectively. The prevalence of HIV/AIDS among adults aged 15 and above infection has contributed significantly to
Nigeria’s low life expectancy (WHO 2010). It was estimated at 2,886 per 100,000 people. It is above the Prevalence rate in Ghana (1722), but
below that of Cameroun (4580). Also, the per capital income in Nigeria is low, with more than half of the population leaving below the
poverty line. Thus, provision of adequate funding for health care either by the household or the government remains difficult.
STATEMENT OF THE GENERAL PROBLEM
The poor economic situation in Nigeria as regards the general living standard and the access to the basic necessities of life has been poor
and nothing to write home about. Access to quality health care has consistently eluded a vast majority of the poor Nigerian masses while
the rich prefer to travel out in research of quality health care services as a result of the near comatose state of our health care system. This
can majorly be attributed to the current standard of living which has been caused by the current economic quagmire the nation currently
finds herself.
AIMS AND OBJECTIVES OF THE STUDY
The major aim of the study is to examine health care cost standard of living on the Nigerian economy. Other specific objectives of the study
include;
- To examine the need for an effective health care delivery on the economy of Nigeria.
- To determine the importance of health care cost on standard of living of Nigerians.
- To assess the current state of Nigerian health care system in Nigeria.
- To determine the relationship between health care cost and the economy of Nigeria.
- To recommend ways of improving the economy of Nigeria through an effective health care system.
SIGNIFICANCE OF THE STUDY
The study would be of importance to the development of the health sector and by extension the development of the economy. The study
would also be of immense importance to students, researchers and scholars who are interested in developing further studies on the subject
matter by providing relevant literature for the study.
SCOPE OF THE STUDY
The study is restricted to health care cost of living and its effect on the economics of Nigeria from 1970-2015
HEALTH CARE COST OF LIVING AND ITS EFFECT ON THE NIGERIAN ECONOMY
