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Does increasing fiscal space effect government funding for health?

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This presentation was given at the Health Financing and Governance Knowledge Synthesis Workshop held on 22-23 March in Abuja, Nigeria.

It presents findings from a RESYST study that sought to examine how Lagos state, Nigeria succeeded in increasing her tax revenue and effect government fiscal space for healthcare in the State.

Published in: Government & Nonprofit
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Does increasing fiscal space effect government funding for health?

  1. 1. http://resyst.lshtm.ac.uk @RESYSTresearch Click to edit Master title style Click to edit Master subtitle style http://resyst.lshtm.ac.uk @RESYSTresearch Does Increase in Fiscal Space have Effect on Government funding for Health? A Study of Lagos State, Nigeria Chijioke Okoli, Hyacinth Ichoku , Nkoli Ezumah, Jane Umeano-Enemuo and Obinna Onwujekwe Health Policy Research Group, University of Nigeria Bolton White Hotel, Abuja, Nigeria March 22-23, 2018 http://resyst.lshtm.ac.uk @RESYSTresearch
  2. 2. http://resyst.lshtm.ac.uk @RESYSTresearch Click to edit Master title style Click to edit Master subtitle style Background • One of the greatest challenges facing SSA countries is how to increase fiscal space for the financing of health sector. • In Nigeria, majority of State governments are not generating enough funds to finance their own budgets, but this is not the case with Lagos. • The State is the least dependent on federally allocated funds with over 70% of its revenue being internally generated (Economic Confidential Viability Index 2016; NBS 2017) .
  3. 3. http://resyst.lshtm.ac.uk @RESYSTresearch Click to edit Master title style Click to edit Master subtitle style Aim • To examine how Lagos state, Nigeria succeeded in increasing her tax revenue and effect the increment had on government fiscal space for healthcare in the State.
  4. 4. http://resyst.lshtm.ac.uk @RESYSTresearch Click to edit Master title style Click to edit Master subtitle style Method • Study setting: Lagos state • Study design: mixed methods approach. • Data collection & analysis: Ø Audited annual account reports and budget documents (2000-2011) were reviewed with a data abstraction template. Ø Nine (9) in-depth interviews (IDIs) were undertaken with purposively selected key informants and analyzed using Capacity and Policy framework. Ø Trend analysis of government revenue and expenditure were conducted.
  5. 5. http://resyst.lshtm.ac.uk @RESYSTresearch Click to edit Master title style Click to edit Master subtitle style Results: Fig 1: Major sources of revenue in Lagos state (in nominal billions Naira) 0 10 20 30 40 50 60 70 80 90 100 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Billions Source: Lagos state Audited Financial Reports IGR FAAC VAT
  6. 6. http://resyst.lshtm.ac.uk @RESYSTresearch Click to edit Master title style Click to edit Master subtitle style Fig 2: THE versus TGE (2000 – 2011) 0.00 50,000,000,000.00 100,000,000,000.00 150,000,000,000.00 200,000,000,000.00 250,000,000,000.00 300,000,000,000.00 350,000,000,000.00 400,000,000,000.00 450,000,000,000.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 THE (actual) TGE(actual)
  7. 7. http://resyst.lshtm.ac.uk @RESYSTresearch Click to edit Master title style Click to edit Master subtitle style Fig 4: THE as % of TGE - Lagos State (2000 – 2011) 1.7 2.9 1.5 1.7 2.6 4.8 2.6 3.9 7.9 3.2 2.9 3.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Lagos state Audited Financial Reports
  8. 8. http://resyst.lshtm.ac.uk @RESYSTresearch Click to edit Master title style Click to edit Master subtitle style Qualitative results • Governor’s political will to deliver campaign promises led to reform of Board of Internal Revenue (autonomous): “The governor had made campaign promises but by the time he assumed power in 1999, he realized that he did not have adequate funds to meet the promises. What was being generated then which was like 600 million naira a month was very poor. Considering the business profile of Lagos state, the population and the amount of revenue that will be generated he decided to reform the Board of Internal Revenue” (IDI07).
  9. 9. http://resyst.lshtm.ac.uk @RESYSTresearch Click to edit Master title style Click to edit Master subtitle style Withholding of Federal Allocation empowered the Governor’s resolve to increase IGR • “Although withholding of federation allocation by Obasanjo led administration (AC and PDP conflict) was illegal but it also made the then governor, his Excellency Ahmed Tinubu realize that he cannot depend on federal allocation………, so withholding of those funds empowered his determination to make sure that he looks internally to grow his revenue” (IDI09).
  10. 10. http://resyst.lshtm.ac.uk @RESYSTresearch Click to edit Master title style Click to edit Master subtitle style Low absorptive capacity of MoH constrains allocation to health sector “…. in fairness to government, I believe, we can only ask for more if we are able to finish what we are given. Because, since I came here, [frowns his face] ....I was wondering, why are we given so much and at the end of the year, we will return it back…. So until we are able to finish what we are given within a year, then we can now start arguing for more. ……….. Like last year, so many billions have been taken from us, when they saw that our budget was not performing well. They have to adjust the budget… so much money taken from us has been given to some ministry to offset their own budget” (IDI03).
  11. 11. http://resyst.lshtm.ac.uk @RESYSTresearch Click to edit Master title style Click to edit Master subtitle style Conclusion • Lagos state succeeded in raising its IGR from ₦500 million a month in 1999 to ₦20 billion a month in 2011 and does not depend on its expected share from the Federal allocation. • This is attributable to the introduction of e-payment initiative, tax compliance by the populace and aggressive tax drive by the state government through Board of Internal Revenue. • However, the State government’s increased revenue did not translate to increased funding to health sector (still far below the 15% Abuja Declaration).
  12. 12. http://resyst.lshtm.ac.uk @RESYSTresearch Click to edit Master title style Click to edit Master subtitle style http://resyst.lshtm.ac.uk @RESYSTresearch RESYST is funded by UK aid from the UK Department for International Development (DFID). However, the views expressed do not necessarily reflect the Department’s official policies. http://resyst.lshtm.ac.uk @RESYSTresearch

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