Meeting Nigeria s vaccines financing needs (2016-2025) Inter-ministerial meeting discussion document April 2016
Objectives of today s inter-ministerial meeting Share the context of immunization financing in Nigeria Provide transparency on the immediate vaccines funding requirements for 2016-18 Align on longer term needs and sustainable funding options 2
CONTEXT Vaccines are a cost-effective healthcare intervention with significant economic impact For every $1 spent on immunization $16 healthcare impact - reduction in morbidity and mortality 1 $44 broader economic and social benefits 1 Average return on investment (cost of illness, treatment, loss of productivity etc) for low and middle income countries till 2020 (range: 9.78-24.91) SOURCE: Gavi estimates (Health Affairs 35. N0 2 (2016): 199-2017 DOI: 10.1377/hitaff.2015.1086) 3
CONTEXT Nigeria s immunization program is composed of life-saving vaccines that have already been introduced by peers Category Vaccine Disease prevented Nigeria Kenya Ghana S/Africa BCG Tuberculosis Measles Measles Hep-B Liver cancer Traditional program Pentavalent Whooping cough, tetanus, liver cancer and diphtheria and hemophilia OPV Polio Yellow fever Yellow fever TT/Td Tetanus Recently introduced PCV IPV Pneumonia Polio Planned introductions HPV Rota Men-A Cervical cancer Diarrhea Meningitis SOURCE: Gavi 4
CONTEXT These vaccines can save 4.6 million lives from vaccine preventable diseases over the next 10 years 4.6 million Deaths of Nigerian children averted from vaccine preventable diseases Vaccine preventable diseases cause significant morbidity including deafness, impaired learning and other disabilities SOURCE: World Bank, CDC, BMGF field visit to Yola IDP, 28 th March, 2016 (Picture of a child suffering from measles) 5
CONTEXT Government s funding obligation will increase 4.5x from $85 million in 2016 to $378 million in 2025 Total vaccine cost (RI and Non-polio SIA) split between Gavi and Government 1,2 $ Million Gavi Govt. Now Immediate Long term 2016 costs have been fully covered 277 322 X4.5 306 396 186 327 104 353 74 345 360 365 378 191 85 199 123 165 141 210 223 279 345 360 365 378 2016 17 18 19 20 21 22 23 24 2025 1 Cost of procuring vaccines, devices, freight, insurance and handling; operational costs not included 2 2016 to 2021 RI funding split estimated based on Gavi transition scale in cmyp; For Non-polio SIA, Gavi finances 50% of measles, 50% of yellow fever and 100% of Men-A vaccines only. This arrangement will continue up till 2021; Post 2021, GoN bears full costs of vaccines. SOURCE: Nigeria cmyp as at December 31, 2015 6
FUNDING REQUIREMENTS We will discuss two critical elements of the immediate funding requirements Funding gap How much does Nigeria require to procure vaccines for 2017 and 2018? Cash flow requirements What is the optimal schedule for funds to be processed and ensure on-time vaccine delivery? SOURCE: NPHCDA 7
FUNDING REQUIREMENTS- GAP There is a funding gap of $231 million for 2017-2018 vaccines procurement that could be addressed in the 2017 budget Funding sources and gap for vaccines procurement (RI and Non-polio SIA), 2017-18 $ Million 264 33 231 141 123 2017 funding needs 2018 funding needs Total 2017-18 funding needs Confirmed funding 1 Funding gap 1 Consists of $8 million rollover of current World Bank loan; $5 million rollover of 2015 budget and $20 million from the 2016 budget SOURCE: Nigeria cmyp as at December 31, 2015, World Bank, UNICEF, BMGF, Interviews with NPHCDA, 2016 draft appropriation bill 8
FUNDING REQUIREMENTS- CASH FLOW To ensure that there are no stock-outs, budgeting should to take place 2 years before vaccines need to be delivered Principles of vaccines procurement Vaccine orders must be placed 6 months in advance to allow for production and transportation Payments are typically made on an annual basis to avoid stock outs, meaning the funds should to be available a year in advance NPHCDA needs to already plan for the vaccine required for 2017 and 2018 in the 2017 budget being prepared now to ensure prompt delivery SOURCE: UNICEF, NPHCDA 9
LONG TERM FUNDING OPTIONS In the long term, Nigeria could significantly improve funding for healthcare Out of pocket expenditure 1 (% of total health expenditure), 2013 Percent 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 0.5 Nigeria Chad Cameroon Guinea South Sudan Kenya Sudan Ghana Rwanda Swaziland 1.0 1.5 2.0 3.0 4.0 5.0 6.0 7.0 8.0 1 Health expenses borne by individual citizens out of their own pocket South Africa Lesotho R 2 =0.5545 9.0 Government health expenditure (% of GDP) Percent SOURCE: WHO Website 10
LONG TERM FUNDING OPTIONS To fund vaccine procurement in the long term, there is a broad range of funding options for the government to consider Funding sources Funding initiatives Federal budgetary allocation Ideas being developed by the team Government spending could potentially increase (from 0.2% to ~1% of national budget) specifically to fund vaccines procurement 1 Federal government Basic healthcare fund Access ~$30m potentially available from the basic healthcare fund Multi-lateral short-term debt e.g. World Bank Explore possibility of multi-year WB loan to cover funding shortfalls 2 State governments States co-financing Potential 26% contribution (up to $98m) by states alone with no LGA contribution Potential 48% contribution (up $178m in 2025) by states and local governments from FAAC allocation 3 Private sector/ corporations Corporate fund raising support for vaccines procurement Explore corporates dedicating a portion of ~$20m annual health CSR payments to vaccines Voluntary funding by large corporates 4 Citizens/ other innovative sources Levies Explore potential opportunities across: Telecommunications levy Luxury levy Alcohol levy Tobacco levy SOURCE: Expert interviews, Federal ministry of health 11
LONG TERM FUNDING OPTIONS However, the options could be prioritized by the opportunity size and ease of capture FOR DISCUSSION Size vs. ease of capture of various private sector/innovative funding options Potential opportunity size $ million Bubble size is relative size of opportunity 400 350 300 250 200 150 100 50 0 Tobacco levy Airtime levy Airtime levy proposed to fund African Union Could potentially require new legislation Lower company tax could mean pushback from FIRS and telcos Luxury levy Alcohol levy For potential further deep-dive Corporate donations Federal government budget Multilateral debt Basic healthcare fund State co-financing 2 0 1 2 3 4 5 6 7 8 9 10 Any other options to develop further? Ease of capture 1 10 is easiest 1 Based on feasibility and ease of execution within time horizon 2 Includes state and local government SOURCE: Expert interviews 12
Actions required Align on allocating $231 million for 2017-18 vaccine procurement from Federal government sources Approve engagement of your staff to jointly develop the long term-funding options Align on date of next inter-ministerial briefing 13