Sustainable Procurement and Supply Chain Practices in Nigeria’s Health Sector: Why the Bureau of Public Procurement Must Be Closely Involved in the Management of the Basic Health Care Provision Fund.
Why Better Procurement and Supply Chain of Medicines, Medical Equipment and Health Commodities Must
Become a Pillar of Nigeria’s Health Reform.
By Olanrewaju O. Ogunmilua (PhD)
Nigeria’s health sector has, over the decades, been graced by brilliant, courageous and visionary professionals
whose leadership helped shape institutions, policies and reforms, often under severely constrained circumstances.
The history of healthcare development in this country is therefore not a history devoid of talent or ideas. It is
one marked by exceptional individuals striving to build durable systems within an environment shaped by
inadequate funding, institutional weakness, policy discontinuity and broader governance difficulties. Among these distinguished figures is Professor Eyitayo Lambo, whose tenure as Minister of Health brought renewed attention
to health financing and to the strengthening of Nigeria’s healthcare delivery architecture. The late Dr. Dora
Akunyili demonstrated, through her leadership of the National Agency for Food and Drug Administration and
Control, what determined institutional leadership could achieve in confronting counterfeit and substandard
medicines. Nigeria must equally acknowledge Professor Ibironke Akinsete, alongside generations of physicians, pharmacists, nurses, researchers, administrators and public health specialists who have given the greater part of their professional lives to improving health outcomes. And yet, the struggle continues.
The country continues to contend with inadequate primary healthcare infrastructure, shortages and uneven
distribution of medical personnel, outward migration of health professionals, high out-of-pocket expenditure and insufficient domestic manufacturing capacity for medicines and equipment. Behind many of these difficulties, however, lies a problem that receives considerably less policy attention: the governance of health
procurement and of the Basic Health Care Provision Fund. A hospital may receive an appropriation.
Patients benefit only when the right medicines, diagnostics, consumables and commodities are purchased at the
right quality and price, at the right time, and delivered to the facilities where they are actually needed.
Procurement is therefore not merely an administrative activity within the health system; it is the mechanism
through which health financing is converted into health delivery.
Arney and Yadav, writing for the William Davidson Institute at the University of Michigan, observed that public
entities responsible for procuring essential medicines in developing countries frequently suffer from inadequate technical capacity, weak planning and forecasting, and outdated procurement practice, all of which contribute to elevated medicine costs and commodity insecurity. What their work makes plain is that the institutions charged with delivering universal access are often the least equipped to buy well.
The lesson for Nigeria is not subtle.
Health sector reform without procurement reform will remain incomplete.
The Basic Health Care Provision Fund (BHCPF), established under Section 11 of the National Health Act 2014, is among the country’s most consequential instruments for financing primary healthcare and advancing universal health coverage, and it is financed by a statutory annual grant of not less than 1 per cent of the Consolidated Revenue Fund. Implementation operates through gateways administered by the NPHCDA, the NHIA, the NCDC and the National emergency medical treatment arrangements, with resources directed towards medicines, vaccines, consumables, equipment, facility operations and services. Government reporting places cumulative BHCPF disbursement at approximately 339 billion over twelve years, of which about ₦235 billion was released within the last three years; the second quarter 2026 disbursement of ₦32.9 billion supported more than 8,300 primary healthcare centres through performance-based financing tied to defined disbursement-linked indicators. Government has also supported legislative efforts to raise the statutory allocation from 1 per cent to
2 per cent of the Consolidated Revenue Fund.
As the Fund expands, a fundamental question must therefore be
asked: who ensures that the purchasing power the BHCPF creates actually delivers maximum health
value? That is precisely why the Bureau of Public Procurement (BPP) should be closely involved in the
procurement-governance dimension of BHCPF management.
Health Financing is Only as Effective as the Procurement Behind It
Allocating more money to healthcare does not automatically produce more healthcare, hence between an
allocation and a patient lies a procurement process. Under the NPHCDA gateway, a significant share of
decentralised facility financing is intended specifically for essential drugs, vaccines and consumables, as well as
for equipment, maintenance and transport. The Federal Ministry of Health and Social Welfare has indicated that
approximately 40 per cent of Federal BHCPF funding is applied to essential medicines and health commodities.
By implication, close to two-fifths of the Fund’s Federal component is exposed, directly, to the quality of purchasing decisions taken across thousands of facilities and several tiers of government.
Worthy of note is that the binding constraint may not be the availability of money at all. Press analysis of BHCPF
performance indicates that states have consistently drawn down considerably less than was allocated, with
reported figures suggesting that of approximately ₦131.5 billion allocated in 2024, in the region of 45.4 billion
was accessed, and that allocations rose sharply in 2025 without a proportionate increase in utilisation. These are
press-reported estimates rather than audited figures, and they warrant verification against official BHCPF financial reports before being relied upon in formal submissions. The direction of travel, however, is not seriously in dispute. The constraint is administrative and absorptive at least as much as it is fiscal, and procurement capability sits close to the centre of it.
Effectiveness therefore depends not only on how much money is released, but on whether needs are properly
identified; whether prices are reasonable; whether requirements are aggregated where economies of scale exist;
whether suppliers possess the required capacity; whether medicines and equipment meet quality standards;
whether contracts are properly managed; and whether purchased commodities actually reach facilities when they are needed.
These are procurement-governance questions. If BHCPF reform attends only to financial disbursement and expenditure reporting, without equally strong procurement intelligence, government risks measuring how much money has been transferred rather than how much health value has been purchased.
A 558 Billion Approval Places Procurement Capability at the Centre
In August 2026 the Federal Executive Council approved health infrastructure projects valued at approximately
558 billion, comprising about ₦255.66 billion for the redevelopment of the National Hospital, Abuja, and about
₦302.3 billion for a new National Institute for Cancer Research and Treatment facility. The National Hospital
package was reported to consist of roughly ₦18.74 billion for a new administrative and management block,
₦64.92 billion for modular clinics and theatres, ₦103 billion for a new wing and 69 billion for a Neuroscience
Institute, with the cancer institute carrying a 36-month delivery period. Funding, according to the Minister of
Health and Social Welfare, comes through National Assembly appropriations already reflected in the 2025 and 2026 budgets rather than through direct ministry allocation.
The significance of this for the present argument is arithmetical before it is anything else. A single Council sitting
committed more to two facilities than the BHCPF disbursed in twelve years. This is not an objection to the investment.
Specialised oncology and quaternary capacity are long overdue, and Nigerians who presently travel abroad for cancer treatment, or who do not travel at all, have waited far too long. It is, rather, an observation about where procurement risk now sits. Capital programmes of this magnitude carry the familiar exposures of large public construction: scope modification, cost variation, delivery slippage and concentration of award.
That is not, in itself, evidence of impropriety, and no such inference is drawn here; it is, however, precisely the pattern that a functioning procurement assurance system exists to observe and explain.
The Bureau has already moved in this direction. In May 2026, pursuant to Sections 5(a) and (o) of the Public
Procurement Act, the BPP issued guidelines centralising the review and certification of all requests for revision of contract sums and modification of contract scope, superseding the arrangement that had obtained since 2013.
Applied consistently to the ₦558 billion programme, that instrument is the difference between a cancer centre
delivered within 36 months at appropriated cost and one that arrives late and materially more expensive. By
extension, the discipline that should govern a ₦302.3 billion oncology contract is the same discipline that should
govern a modest consignment of antimalarials at a rural primary healthcare centre. Only the scale differs.
The BPP Already Possesses the Institutional Mandate for Procurement Governance
The argument for stronger BPP involvement should not be understood as asking the Bureau to assume the
statutory responsibilities of the Ministry of Health, the NPHCDA, the NHIA, the NCDC, states or individual healthcare facilities. Rather, the Bureau should supply the procurement architecture, standards, intelligence and assurance supporting the Fund. Section 5 of the Public Procurement Act 2007 expressly
assigns the Bureau of Public Procurement (BPP) functions that are directly relevant to the expenditure of BHCPF funds. These functions include formulating procurement policies and guidelines; supervising their
implementation; monitoring the prices of tendered items and maintaining a national database of standard prices;
conducting procurement research and surveys; preparing and updating standard bidding and contract
documents; organising training for procurement professionals; reviewing procurement and contract-award
procedures; conducting procurement audits; and developing and maintaining procurement databases and related
technology.
These statutory functions are directly relevant to the challenges associated with the effective procurement of
medicines and other health commodities. Consequently, BPP involvement in BHCPF-related procurement should
not be viewed as an institutional intrusion. Rather, it would constitute the appropriate application of Nigeria’s
established procurement-regulatory expertise to one of the country’s most significant social investments.
BPP Price Intelligence Could Protect the Fund Essential medicines and health commodities are purchased repeatedly, across thousands of facilities and multiple jurisdictions, and without credible benchmarking identical commodities may be bought at widely divergent prices.
Section 5(e) of the Act already requires the Bureau to monitor the prices of tendered items and maintain a
national database of standard prices, and the Bureau has previously worked towards a price-checker instrument
for commonly procured goods. That responsibility could be applied considerably more strategically to health
expenditure. Working with health-sector institutions, the BPP could support the creation of a National Health
Procurement Price Intelligence Platform covering high-volume categories such as essential medicines, medical consumables, basic diagnostic equipment, maternal-health commodities, personal protective equipment, cold-chain equipment and frequently purchased PHC supplies, among others. Such a platform would not impose one inflexible price nationwide. Geography, logistics, exchange-rate movement and market conditions differ.
It would instead establish defensible benchmark ranges capable of identifying abnormal pricing and supporting
better negotiation. If the Fund exists to expand access to healthcare, every procurement saving effectively
enlarges the number of Nigerians it can serve.
Aggregating Demand Could Dramatically Increase Purchasing Power
Section 18(d) of the Public Procurement Act requires procuring entities to aggregate their requirements wherever
possible, both within a procuring entity and between procuring entities, in order to obtain economies of scale
and reduce procurement cost. This has enormous relevance to the BHCPF. Thousands of PHCs purchase many
of the same medicines and consumables, and if every facility buys independently in very small quantities,
government forfeits the advantage created by its own collective demand. A more strategic model would allow
the BPP, the NPHCDA and relevant health agencies to identify categories suitable for aggregated purchasing or
framework arrangements, while allowing facilities to retain flexibility over actual ordering. The principle would be: centralise market intelligence and negotiating power; decentralise consumption-driven ordering. This preserves the direct-facility-financing philosophy while reducing fragmentation.
Framework Agreements Could Create Continuous Medicine Supply
Arney, Yadav and colleagues found that, given adequate technical capacity and appropriate legal provision, framework agreements can furnish flexibility in ordering and delivery while maintaining transparency and improving value for money. This is directly applicable to BHCPF facilities. Instead of running fragmented procurement processes each time medicines run low, qualified suppliers could be competitively appointed under framework arrangements, with facilities placing call-off orders according to consumption and approved limits. It is not entirely clear, however, that the existing statute accommodates this cleanly. The procurement methods
expressly provided for in the Public Procurement Act 2007 are open competitive bidding, two-stage tendering, restricted tendering, request for quotations, direct procurement and emergency procurement; framework
agreements are not among the named methods, and their use has proceeded on the basis of Bureau guidance rather than express statutory provision.
This thus stresses the need for the BPP to settle the legal architecture, standard documents, competition safeguards and contract-management rules before framework purchasing is scaled across the health sector. Done properly, it would turn BHCPF financing into a continuous medicinereplenishment system rather than a series of isolated procurement events.
BPP Can Help Create the Foundation for Revolving Medicine Funds
This is not to say that revolving arrangements are new to Nigeria. Drug revolving fund schemes have operated
in various states since the Bamako Initiative era, with a decidedly mixed record, and their recurrent failure mode
is well understood: capital erosion through inflated purchase prices, weak inventory discipline and unrecovered
credit sales. The picture is complicated by the fact that those same weaknesses would reappear at larger scale
under any BHCPF-seeded arrangement. Where policy permits appropriate cost recovery or insurance reimbursement, initial BHCPF-supported procurement could provide seed stock, with proceeds or reimbursements ring-fenced for replenishment. Such arrangements survive only where procurement prices remain controlled, inventory is properly managed and supplier contracts are professionally administered. Without price intelligence and procurement discipline, a revolving fund simply becomes a revolving mechanism for paying inflated prices.
Contract Management Must Become a BHCPF Priority
One of the strongest lessons from international health procurement is that procurement does not end at contract
award. This matters particularly for the BHCPF because purchasing occurs across multiple levels of government
and thousands of facilities. The BPP can introduce standard supplier-performance indicators covering delivery reliability, quality compliance, adherence to agreed prices, order fulfilment, product expiry, replacement
obligations, equipment maintenance and response times, among others. Over time this would build a national record of health-sector supplier performance. Government should not repeatedly contract suppliers with serious
delivery or quality failures merely because institutional procurement memory is fragmented.
Digitalisation Should Connect BHCPF Financing with Procurement Data
Government has already moved towards stronger digital visibility in BHCPF implementation through health
information systems and performance-based financing tied to disbursement-linked indicators. The next step
should be integrating procurement information into that architecture. A BHCPF procurement dashboard could
allow authorised policymakers to see what facilities are purchasing, in what quantities, at what prices, from which
suppliers, and with what delivery status, inventory position and supplier performance record. The Bureau’s
statutory responsibility for procurement databases and procurement technology makes it the natural technical
partner in designing this component. Such integration would move BHCPF oversight from retrospective
expenditure auditing towards something much closer to real-time procurement intelligence.
Procurement Can Also Support Nigerian Pharmaceutical Manufacturing
The purchasing power of thousands of PHCs represents predictable demand for pharmaceuticals, consumables
and basic medical products. If that demand is properly aggregated and communicated to the market, it provides
an investment signal to credible Nigerian pharmaceutical and medical-supply manufacturers. Multi-supplier
frameworks can be structured to allow qualified local producers to participate according to capacity while
preserving competition and health-quality standards. The BHCPF, working through BPP architecture, could
therefore serve two objectives simultaneously: improving medicine security and strengthening Nigeria’s
health-industrial capacity. This, however, does not in any genuine way downplay the primacy of quality.
Local-content objectives must never compromise medicine standards, and any such procurement architecture
would need to operate alongside NAFDAC and the relevant health-product regulators. The intention is to
strengthen the existing BHCPF governance structure, not to replace it.
The Presidency Should View BHCPF as a Test Case for Strategic Procurement
The Fund offers an ideal opportunity for the Federal Government to demonstrate the wider proposition that public
procurement should function as an instrument of development strategy rather than a compliance formality. The
question should no longer be limited to: how much was released to the BHCPF? It should increasingly become: how much healthcare did each naira purchase?
That transition requires procurement expertise at the management table. The BPP should accordingly work closely with the Federal Ministry of Health and Social Welfare, the NPHCDA, the NHIA, the NCDC, emergency medical authorities, state governments and implementing facilities, so that financial expansion is matched by purchasing efficiency.
Conclusion: Protect the Fund by Protecting Its Purchasing Power
From the foregoing, it is evident that the larger the Fund becomes, the greater the importance of professional
procurement governance. The BPP’s involvement should not be viewed merely through the narrow lens of
approving contracts. Its strategic value lies in helping the BHCPF plan better; buy better; negotiate better;
benchmark prices; aggregate demand; manage suppliers; reduce stock-outs; prevent waste; strengthen domestic health industries; and ultimately obtain more healthcare from every naira
spent. The Ministry of Health should remain responsible for health policy. The BHCPF gateways should continue
implementing their statutory mandates. States and facilities should continue delivering services. But the Bureau
of Public Procurement should become the procurement-intelligence and assurance partner
protecting the purchasing power of the Fund. Because the sustainability of the BHCPF will not ultimately
be judged by the billions of naira released. It will be judged by whether those billions translate into available
medicines, functional primary healthcare centres, reliable medical supplies and measurable
improvements in the health of Nigerians.
It is pertinent to reiterate, finally, that the Director-General of the BPP should be accorded strategic
relevance in national economic decision-making comparable to the leadership of other principal
fiscal institutions, including at meetings of the Federal Executive Council.
Olanrewaju O. Ogunmilua (PhD), is a Procurement Expert based in Nigeria
Ogunmiluao@gmail.com
“In loving memory of my late mother and of Rotimi Adelakum, a procurement specialist, both of whom suffered
cardiac arrest and passed prematurely.”
