Adewole: Tobacco, alcohol taxes should be increased — and used to fund health budget

Isaac Adewole, minister of health, says consumption taxes on products like alcohol and tobacco should be increased and used for the funding of healthcare.

In February, TheCable reported that Kemi Adeosun, minister of finance, had written to President Muhammadu Buhari seeking permission to increase tariff on alcohol and cigarettes.

Speaking on Tuesday at THISDAY healthcare financing policy dialogue in Abuja, Adewole said Nigeria has the lowest health budget in the world.

He said health financing in Nigeria is mostly from out-of-pocket spending.

Out-of-pocket spendings are costs incurred on health care services that are not reimbursed by insurance.

The minister said: “As a result, OOP spending accounts for 75.2 percent of total health expenditure – among the highest in the world – and 25 percent of households spend more than 10 percent of their household consumption health; a sign that more people are prone to poverty traps if they fall ill, for a country of our size. This is not acceptable.

“In the issue of tax rate, 5 percent, our value added tax is one of the lowest in the world and there are opportunities to expand this by increasing taxes on the consumption of harmful products such as alcohol and tobacco.

“In particular, our tobacco excise rates of 20 percent are well below the 75 percent World Health Organisation benchmark.”

Adewole urged states to invest in the health sector rather than allow the federal government shoulder the responsibility alone.

He said: “This is my third year as a minister. When there’s disease outbreak in Calabar, there is diarrhoea in Kano, they say it’s the minister of health’s problem. Where are the commissioners of health?

“We should not assume that they do not have any role to play and everything is on the federal ministry of health; that is wrong.

“The states have a role to play, they have responsibilities, there are people in those states who need to be taken care of. But everything is for the federal government to resolve. Maybe, when oil prices were high and there was a lot of money, the federal government could take on everything.

“The states are not improving their health workforce; they are not employing nurses, they are not employing doctors, they are not even paying their salaries. At the state level, a consultant in the state earns close to what the most junior doctor at the federal level will earn.

“That is where we have a problem. So, we need to work together.”