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Forming a collaborative mechanism for budget reforms in Nigeria

Part 1 of 2

Nigeria’s health sector was ranked as the lowest in its budget performance among all sectors in the country, according to a report by the Nigerian government’s Fiscal Responsibility Commission. This was due largely to the variance between policy priorities and the annual budget.

To help identify the specific problems facing the health budget and recommend ways to address them, the Federal Ministry of Health (FMoH) arranged for its budget process to be independently assessed. This effort was funded by the World Bank and the Bill & Melinda Gates Foundation — with technical support provided by Results for Development (R4D) and PricewaterhouseCoopers (PwC).

Recommendations from the assessment resulted in three clear directives from the Honourable Minister for Health (HMH), including:

  1. Reinstatement of the Planning Cell (PC) structure for budget formulation at the departmental level
  2. Refinement of departmental mandates to promote departmental budget improvement
  3. Convening of a retreat to launch the budget process reforms.

In 2018, the FMoH convened the recommended three-day multi-stakeholders’ retreat to launch key reforms, brainstorm approaches to improve the budget process and present a roadmap for improvements.

During this retreat, stakeholders proposed a collaborative mechanism between the Department of Health Planning, Research and Statistics (DHPRS), which is responsible for strategic health planning, and the Department of Finance and Accounts (DFA), which is responsible for budgets in the Federal Ministry of Health..

The mechanism — known as “The Planning and Budget Committee” (P&B Committee) — was approved at the 62nd National Council on Health (NCH) meeting. The P&B Committee was charged with a major responsibility of overseeing the budget process, which encapsulated other recommendations from the assessment completed in 2017.

It is important to note that, in theory, it is easy to establish a collaborative mechanism. But the challenge lies in the processes involved in making it functional, as this potentially disrupts the norms within the Federal Ministry of Health, particularly the departments (DHPRS & DFA) involved.

Institutionalizing this collaborative mechanism was not a walk in the park, but, through dogged efforts and support from change agents within the FMOH and collaboration with local partners, it became a reality.

In 2019 — building on the initial study and with the aim to further unpack the drivers of underperformance of the planning cells — R4D and Health Systems Consult Limited (HSCL) conducted a capacity assessment of the re-instituted planning cells and designed targeted capacity building initiatives to address gaps.

In July of the same year, R4D partnered with Sydani Initiative for International Development to support the FMoH in implementing capacity building initiatives. Now, the P&B committee is striving towards taking ownership of this process and fully supporting these initiatives on its own.

How it was formed

A disconnect had historically existed within the FMOH; between the department that develops policies, the DHPRS and the department that oversee the budget development process, the DFA. Due to this disconnect, the DHPRS has been unable to view the overall health budgeting process in light of strategic health policies.

Establishing this collaborative mechanism is an effort focused at reducing this fragmentation such that formal communication mechanisms can be explored between the DHPRS and DFA.

Hence, the overall goal of the P&B Committee is to strengthen communication channels and the coordination of planning and budgeting processes by both departments with the aim of ensuring an overall improvement in budgeting practices of the FMOH.

A lot of processes go into institutionalizing structural mechanisms at the FMoH to help make annual Federal Government of Nigeria (FGON) health budget more strategic, transparent, and predictable. Several challenges were also encountered during these institutionalization processes.

However, it is worthy of note that the Honourable Minister of Health’s approval of the resolutions reached at the retreat to establish this collaborative mechanism helped to smoothen the journey. To bring to reality the recommendations by the HMH and the Permanent Secretary of Health (PSH) for the P&B Committee setup during the retreat, the heads of the DHPRS and DFA became fully involved in the budgeting process as co-chairs of the P&B committee and had the responsibility of identifying the members of their respective departments that would constitute the committee.

Presently, the P&B Committee consists of a total of 20 persons drawn from the DHPRS and DFA.

The P&B committee is expected to establish stronger partnerships between the senior leadership and personnel of the DFA and the DHPRS, define clear areas for collaboration between the DFA and DHPRS across planning and budgeting, identify mechanisms by which the DFA and DHPRS can support Departments, Agencies and Parastatals (DAPs) of FMoH through their respective institutional leadership and planning cells all through the budget process. The committee is responsible for coordinating all the planning cells within FMOH and supporting them to conduct the internal budget formulation and monitoring processes for their various DAPs; by conducting an in-house call circular process to create a shadow budget for review/analysis and prioritization ahead of the official call circular from the Ministry of Finance, Budget and Planning that kicks-off the budget process for Nigeria. The shadow budget process is to be done at least once a year, it builds on departmental budgets developed by the planning cells and serves as a mechanism for routine practice on budget preparation.


Establishing the P&B Committee, though difficult, was a step in the right direction toward improving the budget process in the Federal Ministry of Health. Stay tuned for the second part of this two-part series that sheds more light on the challenges encountered, achievements of the P&B committee and lessons learned.

Read Part 2 of 2

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