World Bank Approves $40 Million to Strengthen Financial Protection for Poor Nigerians Under Health Reform Plan

World Bank has approved a $40 million performance-based loan to expand healthcare for poor Nigerians.

The funding, tied to verified state performance, aims to reduce out-of-pocket costs and boost insurance.

SEE ALSO: World Bank Cuts $4 Million From Nigeria’s Loan

In a move aimed at boosting healthcare access and financial security for Nigeria’s most vulnerable populations, the World Bank has approved a $40 million performance-based loan. This funding forms part of a broader health sector intervention under the HOPE-Health Program-for-Results initiative, designed to enhance the country’s healthcare resilience.

The new allotment, approved on September 26, 2024, is tied to Disbursement Linked Indicator 3 (DLI 3), a performance-based metric that focuses on increasing financial protection for poor Nigerians. This includes expanding access to health insurance and reducing out-of-pocket healthcare costs that disproportionately burden low-income families.

The $40 million will only be disbursed to the Nigerian federal government, and subsequently to the states, based on verified performance. States are required to meet specific benchmarks, including improving the number of financially protected individuals through credible healthcare coverage programs.

The allocation is part of Result Area 2 of the HOPE-Health program, which is primarily concerned with enhancing the utilization of essential healthcare services. Overall, this outcome area is backed by $272.5 million, comprising $239 million from the International Development Association (IDA) and an additional $33.5 million in grants from the Global Financing Facility (GFF).

The overarching goal of the HOPE-Health initiative is to transform Nigeria’s healthcare landscape by fostering resilience, expanding access, and strengthening service delivery. Key areas of focus include improving maternal and child health, deploying digital infrastructure, and initiating critical institutional reforms across both the federal and state levels.

A notable aspect of this initiative is its sector-wide approach, which encourages the alignment of domestic and international stakeholders under a unified implementation structure. This collaboration is seen as crucial to streamlining resources, preventing duplication, and ensuring sustainable impact.

The program is structured using a Program-for-Results approach, which links disbursements directly to measurable outcomes. Complementing this structure is an Investment Project Financing component that supports technical assistance and capacity building. Agencies such as the National Primary Health Care Development Agency (NPHCDA) and the National Health Insurance Authority (NHIA) are among the beneficiaries of this technical support.

Beyond the financial protection component, the initiative will also deploy public health fellows to all 774 local government areas across Nigeria. These professionals will help facilitate the on-the-ground implementation of digital health platforms and maternal health innovations, especially in underserved and climate-vulnerable communities.

Additionally, the HOPE-Health program emphasizes equity in service delivery. This means prioritizing interventions in areas where healthcare access has traditionally been weak or nonexistent, thereby attempting to bridge the urban-rural healthcare divide.

According to World Bank documentation, the DLI 3 disbursement is both time-bound and scalable, meaning payment amounts will vary based on the extent and timing of implementation by each state. This model encourages accountability and results-driven governance at sub-national levels.

Meanwhile, concerns remain about the government’s ability to meet performance standards, as evidenced in a related development involving another World Bank facility. Nigeria risks losing $4 million from a separate $103 million public financial management loan under the Fiscal Governance and Institutions Project due to its failure to meet auditing standards. The project’s evaluation highlighted significant shortcomings in audit reports from the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service.

Nonetheless, the $40 million health loan remains a potentially game-changing investment. It directly targets one of the most pressing issues in Nigeria’s healthcare financing landscape: the overwhelming reliance on out-of-pocket payments. By extending financial protection mechanisms to those who need it most, the World Bank initiative seeks to reduce inequality and strengthen the overall health system.

As implementation unfolds, much will depend on state-level performance, institutional readiness, and sustained policy commitment. If successful, the program could serve as a model for scaling healthcare financing reforms across other developing nations facing similar systemic challenges.