Strengthening Primary Healthcare Through Ring-Fenced Financing and Direct Facility Funding in Nigeria
Download the Full PaperExemplar Overview
This exemplar examines Nigeria's ring-fenced primary healthcare financing through the Basic Health Care Provision Fund (BHCPF) and its Direct Facility Financing (DFF) mechanism, bypassing administrative layers to send funds directly to clinics.
Nigeria's decentralized health system was historically marked by high out-of-pocket spending (exceeding 70%) and chronically underfunded primary clinics. The 2014 National Health Act created the BHCPF, which earmarks at least 1% of the Consolidated Revenue Fund for primary healthcare. The funds flow through gateways: NPHCDA (45% for Direct Facility Financing), NHIA (50% for vulnerable group insurance), NEMT (1% for emergency transport), and NCDC (4% for disease surveillance). DFF bypasses state governments, sending funds directly to PHC bank accounts to prevent leakage.
Policy Recommendations
Legally ring-fencing funds (the 1% CRF rule) ensures that financing for primary healthcare remains protected across political transitions.
Direct Facility Financing reduces administrative leakage and provides clinics with the autonomy to manage operating expenses and procure local supplies.
A phased scale-up linked to readiness scorecards incentivizes states and facilities to improve governance before receiving funding.
External shocks (like donor freezes) underscore the urgency of transitioning from donor-dependent vertical programs to integrated domestic primary care funding.
Key Numbers
Primary healthcare clinics receiving direct funding in 2025
Patient visits to BHCPF-financed clinics by mid-2025
Increase in clinic utilization within 18 months of rollout
Naira approved for the BHCPF budget in 2026
Key Findings
The BHCPF established a protected financing stream by legally earmarking at least 1% of the federal Consolidated Revenue Fund for primary care.
Primary health facilities receiving Direct Facility Financing grew from 100 at launch to over 8,300 in 2025, with a 2027 target of 17,600.
Visits to BHCPF-financed clinics increased four-fold within 18 months, rising from 10 million in early 2024 to 45 million by mid-2025.
Statutory transfers to BHCPF expanded from ₦55.15 billion in 2018 to an approved ₦298.4 billion for 2026, representing a major scale-up.