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PROJECT TOPIC: HEALTH CARE COST OF LIVING AND ITS EFFECT ON THE NIGERIAN ECONOMY

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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 ofeconomic growth differentials between developed and developing nation is attributable to ill-health and low life expectancy. Developedcountries spend a high proportion of their Gross Domestic Product (GDP) on Health Care because they believe that their resident health canserve as a major driver for economic activities and development. To this end, Governments in Nigeria, over the years have been makingfrantic efforts at ensuring that there is an increase in the level of public expenditure on health. In 1970, recurrent expenditure on health wasN12.48 million. This figure rose astronomically to N52.78 million and N132.02 million in 1980 and 1985 respectively. This trend continues asthe 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 2007and 2008 respectively. The aforementioned scenario clearly underscores the fact that health care expenditure in Nigeria has been on theincrease over the years. However, in spite of all these increase, much impact has not been made in the area of reduction of infant, under fiveand maternal mortalities since 1970. For instance, the Nigeria’s rate of infant mortality (91 per 1000 live births) is among the highest in theworld, and the immunization coverage has dropped below thirty percent while the mortality rate for children under age five is 192 deathsper one thousand. By year 2007, it was reported that more than one hundred and thirty four thousand women died from pregnancycomplications. In addition, the life expectancy ratio on the average has been on the decline over the study period. It should however benoted that despite the increase in government expenditure in health care in Nigeria, the contribution of this to health is still marginally lowwhereas 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 Humancapital in achieving sustainable economic Growth has been documented. Growth theories suggest the role of human capital in achievingsignificant growth in the economy. The economic view of human capital encompasses education, health, training, migration, and otherinvestments that enhance an individual’s productivity. Outcome from several studies seem to suggest that there is a positive correlationbetween health status and sustainable economic growth. The wide acceptance of this nexus prompted the prominence of health outcomein the Millennium Development Goals (MDGs). In fact three of the goals are health specific while the others can also be regarded as healthenhancing. Thus, the development of human capital becomes more important in many resource constraint countries like Nigeria. Theopportunity costs of spending on health is very high and thus the need for a justification on the increase or otherwise of health spending inNigeria. Incidentally, Nigeria is among the developing nations with poor health outcomes and its attendant problems. The health status ofNigeria is still considerably low and exists below that of some countries in West Africa. Low life expectancy at birth, high infant and maternalmortality rates, malaria and tuberculosis alictions are some of the characteristics features of the Nigeria`s health status. Life expectancy atbirth in Nigeria was estimated at only 48 in 2007, compared with 56 in Ghana. This is complemented by the high numbers of women who dieof complications during pregnancy or childbirth. Although the global maternal mortality ratio of below 400 maternal deaths per 100 000 livebirths 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 inGhana and Guinea respectively. The prevalence of HIV/AIDS among adults aged 15 and above infection has contributed significantly toNigeria’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), butbelow that of Cameroun (4580). Also, the per capital income in Nigeria is low, with more than half of the population leaving below thepoverty line. Thus, provision of adequate funding for health care either by the household or the government remains difficult.


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