NHIA, Senate Push Health Taxes to Fund Healthcare and Fight Diseases

Reported by Ariajegbe Sylvia Esezobor 

The National Health Insurance Authority and the Senate have called for stronger health tax reforms in Nigeria to promote sustainable healthcare financing, expand health insurance coverage and reduce the growing burden of non-communicable diseases, at a National Stakeholder Co-creation Workshop on Realising Health Taxes for Sustainable Health Financing and Curbing Non-Communicable Diseases held in Abuja on Wednesday.

The NHIA Director-General, Dr Kelechi Ohiri, said health tax reform required collaboration among government ministries, lawmakers, the private sector, civil society organisations, the media and other stakeholders, and that it was not the mandate of any single sector or ministry. "Health-tax reform is not the mandate of any single sector or ministry. It has to involve the leadership of the Ministry of Finance, Budget and Planning, the private sector, civil society, the media and all stakeholders," he said. Ohiri said Nigeria was grappling with infectious diseases and maternal mortality while facing an increasing burden of non-communicable diseases associated with the consumption of sugar-sweetened beverages, tobacco and alcohol. He added that the country also needed predictable domestic financing to strengthen its healthcare system and improve access to essential services. "Health taxes offer a promising strategy for addressing both challenges," he said, describing them as public health interventions capable of influencing consumption patterns and generating domestic resources for healthcare.

Ohiri disclosed that the Senate had passed the Sugar-Sweetened Beverage Tax Bill sponsored by the Senate Committee on Health, and that it was awaiting concurrence by the House of Representatives. He said the chairman of the House Committee on Health had indicated a commitment to attend to the bill. "The proposed reforms seek to strengthen the existing SSB tax framework and allocate a portion of resources directly to health promotion, disease prevention and primary healthcare," the NHIA boss said. According to him, the major challenge was to translate proposed reforms into effective implementation through appropriate policy, legal, fiscal and administrative arrangements, and stakeholders must identify the political leadership, institutional capacity and public financial management mechanisms required to ensure transparency and accountability in the collection and utilisation of the revenue. Citing the Philippines as an example of a country that used health taxes to expand health insurance coverage, Ohiri said Nigeria could adopt similar approaches to reduce the disease burden and extend coverage to more vulnerable populations. "Healthcare should be accessible, but it is not cheap. We need to build a workable roadmap so that this does not remain theoretical," he said.

In a goodwill message, the Chairman of the Senate Committee on Health, Senator Ipalibo Banigo, said health taxes should not be viewed solely as a revenue-generation measure but also as a public health intervention aimed at discouraging the consumption of harmful products. Banigo said particular attention should be given to how the revenue would be allocated, stressing the need for a transparent and accountable system that connects tax collection to measurable health benefits, particularly for vulnerable populations. She said the implementation framework should clearly demonstrate how the resources would support health promotion, disease prevention and access to healthcare.

The World Health Organisation Country Representative in Nigeria, Dr Pavel Ursu, said scientific evidence alone would not be sufficient to secure the adoption and implementation of health tax reforms. Ursu said policymakers needed to understand Nigeria's political economy, institutional arrangements and the interests of stakeholders capable of influencing the reform process. He said evidence had to be translated into policy through an understanding of these dynamics, and that health tax reforms required the involvement of the Ministries of Health and Finance, lawmakers, civil society, media, non-governmental organisations and other influential stakeholders.

At the heart of the legislative push are two bills that have already passed third reading in the Senate and are now before the House of Representatives for concurrence. SB.886 amends the National Health Act to raise the statutory allocation to the Basic Health Care Provision Fund from 1 per cent to 2 per cent of the Consolidated Revenue Fund. SB.713 amends the Customs and Excise Tariff Act to replace the flat ₦10-per-litre duty on sugar-sweetened beverages with a percentage-based levy, earmarking a significant share of proceeds for health promotion and non-communicable disease prevention. Senator Banigo, sponsor of both bills, has made the case for reading them as one reform package rather than two separate measures. "The test before the National Assembly is not 'how much more money,' but 'what will additional domestic financing buy for Nigerians?'" she said. She was equally firm that money without traceability was not reform, stressing that appropriation through disbursement to utilisation to results must be visible to citizens.

The Coordinating Minister of Health and Social Welfare, Prof. Muhammad Ali Pate, put the challenge in stark terms. "Health is not cheap. If you want health, you have to pay for it. You cannot expect to drive a Mercedes Benz if you pay for a bicycle," he said. Pate noted that Nigeria had spent less than twenty dollars per capita on health for decades, a reflection of the choices the nation had made, and said world-class healthcare could not be achieved with token investments. He urged lawmakers to pass the proposed health financing reforms while calling on state legislatures to domesticate similar laws, and urged governors to fulfil their commitments to counterpart funding for the Basic Health Care Provision Fund.

Nigeria has taxed sugary drinks since 2021, with the same flat ₦10 per litre regardless of how heavily or barely sweetened a beverage is. That rate has not moved since it was introduced, while prices have climbed sharply around it, meaning the real value of the tax has steadily eroded. A percentage-based levy would not suffer the same fate, as it would automatically adjust with retail prices. The World Health Organisation's 3 by 35 Initiative calls on countries to use tax increases to raise the real prices of tobacco, alcohol and sugary drinks by at least 50 per cent by 2035, and its latest global assessment shows that at least 116 countries already apply a national excise tax to at least one type of sugary drink.

The workshop also featured contributions from Dr Kumanan Rasanathan, Executive Director of the Alliance for Health Policy and Systems Research, who said stakeholders needed to focus not only on securing legislative approval for health taxes but also on demonstrating tangible benefits to Nigerians who paid the taxes, and from Dr Mustapha Lecky, Chairman of the Health System Reform Coalition of Nigeria, who said evidence-based health taxation offered an opportunity to support Nigeria's progress towards universal health coverage while protecting lives. The convergence built on the momentum generated by the National Health Financing Dialogue 2025 and reflected growing collaboration between the health and finance sectors.

The stakes are considerable. Nigeria's health sector has long been underfunded, with out-of-pocket spending accounting for a substantial share of total health expenditure and donor funding playing a significant role in disease-specific interventions. The reforms being pushed by the NHIA and the Senate aim to shift the financing architecture towards domestic resource mobilisation, reducing dependence on external assistance while expanding coverage for the poorest and most vulnerable Nigerians. The coming weeks will determine whether the House of Representatives concurs with the Senate and whether the bills proceed to the President for assent before the 10th National Assembly concludes its legislative tenure.

For Nigerians, the debate over health taxes is not abstract. It touches on the affordability of sugary drinks, the burden of non-communicable diseases, and the resources available to fund primary healthcare in communities across the country. The proposed reforms offer a dual promise: discouraging the consumption of products that contribute to preventable diseases while generating earmarked revenue to strengthen the health system. Whether that promise is realised will depend on the political will to pass the bills, the administrative capacity to implement them transparently, and the accountability mechanisms that connect every naira collected to measurable improvements in the health of ordinary Nigerians. As Ohiri put it, healthcare should be accessible, but it is not cheap. The question now is whether Nigeria is willing to pay for it.

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