On 10th October, 2024, the Nigerian Institute of Social and Economic Research (NISER), in collaboration with African Economic Research Consortium (AERC) organized a high-level Policy Dialogue with the theme “Leveraging Economic Development through Human Capital in Nigeria: The Roles of Foreign Direct Investment and Health. The purpose of the dialogue was to share preliminary research findings and policy implications of the AERC research output on Human Capital Development Project in Nigeria and gathered feedback/inputs from stakeholders to inform policy direction.

Some of the critical findings shared at the event include:

• Nigeria ranks third in Africa for FDI inflows, after Egypt and Ethiopia. Defying COVID-19 headwinds, the country saw increased FDI in 2020, driven by its attractive investment climate.
• Foreign Direct Investment (FDI) in Nigeria is highly concentrated in specific sectors. The manufacturing sector is the primary recipient of FDI, while the ICT sector is emerging as a growing area of investment interest.
• Cross-sectional data findings indicate that FDI inflows contribute significantly to expansion in employment, staff skills development and training, and talent development programmes.
• Mergers and acquisitions (M&A) and foreign investments focused on efficiency are boosting skill development in Nigeria, particularly in manufacturing. In the ICT sector, M&A and resource-driven foreign investments are making the most significant impact.
• Nigeria has very low health insurance coverage, with fewer than 5% of its 208 million people insured. Insurance uptake varies by state but is mostly found in major business areas. Additionally, people working in formal jobs are more likely to have insurance than those in informal jobs, and more men are insured compared to women.
• The most common type of health insurance in Nigeria is private health insurance, especially employer-based insurance. This pattern of health insurance use is consistent across different states. As of 2018, employer-based insurance made up 94% of all private health insurance in the country.
• Nigeria’s National Health Insurance Scheme (NHIS) was started in 2005 to protect families from high medical costs. Even though it’s required for formal workers in public and private sectors, by 2022, it covered less than 5% of the population. This low participation is troubling, especially since various health insurance programs in Nigeria have had difficulty succeeding.
• In Nigeria, healthcare financing mainly comes from Out-Of-Pocket (OOP) payments, which make up about 75% of health spending. Health insurance has contributed very little, averaging only 1.9% from 2010 to 2020 and reaching a peak of 2.3% in 2020. This heavy reliance on OOP payments leads to limited access to quality healthcare, increases the risk of poverty, and raises concerns about Nigeria’s ability to achieve Sustainable Development Goal (SDG) target 3.8 – Universal Health Coverage

Based on these, the following recommendations were given:

• The government is effectively attracting foreign direct investment (FDI) to enhance human capital and should continue to encourage specific types of FDI that have the greatest impact.
• Policies that address both supply and demand challenges are necessary because, although health insurance is mandatory, its uptake remains low, especially among informal workers and women.
• Improving financial inclusion is crucial for increasing health insurance uptake, with a focus on expanding banking access, digital payments, and financial literacy programs.

The institute was ably-represented by the Director-General, Prof. Antonia Simbine, along with Professor Kemi Okuwa (Head, Human Capital Policy Department, NISER) and Professor Abubakar Oladeji (Head, Political and Governance Policy Department, NISER). The AERC Executive Secretary was represented by Dr Charle Owino, and other AERC representatives are Dr Terrence Kairika and Angeline Mwadiwe.