Does Increase in Fiscal Space have Effect on Government Allocations to the Health Sector? A Study of Lagos State, Nigeria

Abstract

Objective: The study examined how Lagos state, Nigeria succeeded in increasing her internally generated revenue and the effect on government allocation to health sector in the State.
Methods: This study was conducted in Lagos state southwest Nigeria using a mixed methods approach. Audited annual account reports and  budget documents of the State (2000-2010) were reviewed with a data abstraction template. Also, nine (9) in-depth interviews (IDIs) were  undertaken with purposively selected key informants in the State and analyzed using capacity and policy framework. Trend analysis of government  revenue and expenditure were conducted.
Results: The findings show that of all the various sources of revenue in Lagos state, internallygenerated revenue (IGR) is the major source of revenue, accounting for over 70% of the State revenue. This was due to the introduction of e-payment initiative, tax compliance by the populace and political will of the State government. Federal government allocated revenue to the State and value added tax (VAT) are the next two most important sources of revenue. Lagos state succeeded in raising its IGR up to 2 to 6-fold over the study period. Indeed, the State is the least dependent state on federally allocated funds in Nigeria.
Conclusion: The-State government’s increased revenue did not translate into increased revenue to health sector although there are increased  infrastructural developments in the State. Often health does not seem to be high on the political agenda of most State governments in Nigeria;  rather issues that create visibility for government are critical in determining resource allocation. This calls for a rethink as government budget to  health shows the priority government gives to health! On the other hand, often, ministries of health lack absorptive capacity and political clout to  argue for larger allocations for health due to dearth of evidence to demonstrate improved performance and achievements in service delivery.