Nigeria’s Economic Crisis: No Fewer Than 50% of Private Hospitals Have Shut Down – GMD President

Nigeria’s private healthcare sector seems to be the latest casualty of President Bola Tinubu’s sweeping economic reforms that has impacted nearly all sectors of the economy, as no fewer than 50 percent of private hospitals have shut down, with the remaining facilities struggling to stay afloat amidst surging operational costs.

The Guild of Medical Directors (GMD) made this alarming revelation that casts a shadow over the sustainability of healthcare services in the country, as hospitals grapple with increasing financial burdens and deteriorating patient patronage.

Speaking in an interview with Sunday PUNCH, Dr. Raymond Kuti, the President of the GMD, provided a harrowing account of the crisis gripping Nigeria’s private healthcare system. According to Kuti, hospitals across the country are finding it exceedingly difficult to meet their operational expenses, mainly due to the rising costs of energy and medical supplies.

He noted, “Averagely, three out of six private hospitals are shutting down every month in Nigeria, and this trend is primarily driven by the challenging economic environment.”

The closures have been particularly devastating for hospitals categorized as Band A facilities under the new electricity tariff, which are more advanced institutions that provide specialized medical services. For these hospitals, the cost of electricity has become a significant drain on resources, with energy expenses rising sharply over the past few years. This, combined with other overheads, has forced many healthcare providers to operate at reduced capacities or to shutter their doors altogether, according to Dr. Kuti.

Dr. Kuti, who also serves as the Chief Medical Director at Prisms Health Care Limited, further elaborated on the rising expenses that have crippled private healthcare facilities. He revealed that the cost of medical consumables—most of which are imported—has increased by an astounding 500 percent, a direct consequence of the country’s volatile exchange rate and the plummeting value of the naira.

“The current exchange rate has made medical items prohibitively expensive,” Kuti lamented, adding that private hospitals now struggle to keep up with the cost of essential medical supplies such as syringes, surgical equipment, and diagnostic materials.

This inflationary pressure on medical supplies reflects Nigeria’s broader economic woes, where the naira has lost approximately 75% of its value since President Tinubu took office last year. The administration’s economic policies, including the elimination of fuel subsidies and the floating of the Nigerian FX market, have been central to these woes. While aimed at fiscal stabilization, these policies have inadvertently compounded the financial struggles of various sectors, with the healthcare industry being among the hardest hit.

Mass Emigration of Healthcare Professionals

The collapse of private hospitals has also been accelerated by a mass exodus of healthcare professionals, driven by the worsening economic situation and unfavorable working conditions. This phenomenon, popularly known as “japa,” has seen thousands of doctors, nurses, and other medical staff leaving Nigeria for better opportunities abroad.

The departure of these professionals has created a critical workforce shortage that has further strained the already struggling private healthcare facilities. Dr. Kuti lamented that there are fewer hands to go around, and those left behind are stretched thin, often working longer hours with inadequate resources.

He explained that the emigration of healthcare workers is not just a result of poor salaries, but also the lack of basic amenities in hospitals.

Unaffordable Healthcare, Yet Another Challenge

Adding to the crisis is the changing behavior of patients, many of whom have been forced to delay seeking medical care or resort to self-medication due to the economic hardships exacerbated by the government’s reform agenda.

“People are struggling to afford healthcare, which leads to a delay in seeking necessary medical attention,” noted Kuti.

He further explained that the steep decline in patient patronage has left hospitals with lower revenues, making it even more difficult to cover their operational costs.

Patients’ hesitancy to seek formal medical treatment has also led to an increase in cases where individuals arrive at hospitals with severe, often life-threatening conditions that could have been managed more effectively if treated earlier. This he said, is not only impacting the quality of healthcare but is also inflating the costs of treatment for both patients and providers, as more resources are required for intensive care.

Since May last year, the government has pursued a series of reforms that have led to a steep rise in living costs, with inflation pushing up the prices of goods and services across the board.

Fuel prices, for instance, have increased fivefold, exacerbating the financial difficulties hospitals, which are heavily dependent on diesel generators for electricity due to frequent power outages, face. Dr. Kuti noted that the cost of running a generator has become unsustainable, and with no relief in sight, more hospitals will inevitably close.

The healthcare sector’s struggle is indicative of a broader trend where various industries have been adversely affected by the government’s policies. While the reforms have been lauded for tackling longstanding economic issues such as subsidy dependency, the transition has come at a heavy price for everyday Nigerians.

Many believe that the healthcare industry’s current crisis underscores the fact that the cost of these reforms is being borne by citizens who are now finding it increasingly difficult to access even the most basic healthcare services.

A Call for Government Intervention

The GMD urgently called on the government to recognize the severity of the crisis and to implement measures aimed at supporting private hospitals, which cater to a significant portion of the population. Dr. Kuti stressed the need for a comprehensive overhaul of Nigeria’s healthcare system, with the private sector playing a central role.

“We need the government to recognize the challenges we face and provide the necessary support to ensure that private hospitals can continue to operate and serve the community,” he implored.

other medical experts have suggested that targeted interventions, such as subsidies for medical supplies, financial aid for energy costs, or incentives to encourage the local production of medical consumables, could alleviate some of the burdens private hospitals face. There are also calls for the government to address the workforce crisis by improving working conditions in the healthcare sector, which could stem the tide of emigration.