By Health & Science Africa
As donor funding continues to dwindle, ensuring the sustainability of vital health programs has become more critical than ever.
In this interview, Mr. Olu Alabi, a public health finance expert and administrator at the Institute of Human Virology Nigeria (IHVN), shares insights on how strategic financial management in the health sector can rebuild confidence among implementing partners and rekindle hope for individuals who depend on life-saving treatment, care, and support; as well as ways to survive funding disruptions , develop sustainability measures and importance of diversifying funding sources among others.
What is the importance of strong financial planning and management in achieving public health goals?
The importance of strong financial planning and management cannot be overemphasized in the successful implementation and sustainability of public health initiatives and their outcomes.
Proper and robust financial planning and management are grounded in several key principles, which I will briefly talk about.
My experience in public health financing, stems from my 13 years at PricewaterhouseCoopers and the six years I have spent at IHVN, where I oversee finance and administration, and regularly engage with donors.
Our goal has always been to ensure that we have solid financial management systems in place at the Institute. From my experience, it is evident that what matters most to donors is accountability and transparency.
They want to be assured that the funds provided are properly managed, used for their intended purposes, and that financial reporting is timely and accurate.
Good financial management allows you to account for received funds and provide transparent, comprehensive reports to stakeholders, including the Nigerian government, communities, donors, policymakers, and clients whose treatment is being funded.
Secondly, there is the principle of value for money. A strong financial system ensures resources are allocated efficiently, not just toward salaries, but toward programmatic activities that ensures critical needs of clients are delivered with maximum impact and minimal cost.
Finally, there is monitoring and evaluation (M&E). Donors are not only interested in health outcomes; they want to assess how efficiently resources are utilized. Financial and programmatic performance must align. With strong systems in place, we can match outputs such as the number of people treated with the costs incurred, offering a complete picture of program efficiency.
The USAID funding freeze earlier this year caught many organizations unawares. As an expert in this field, what is your advice to organizations facing unexpected costs or changes in programming?
It was a shock when the executive order came from the U.S. government. But in my opinion, there are always two sides to a coin. On one hand, it served as a wake-up call to reduce our dependence on external funding.
On the other, it reminded us to look inward and develop programs that we can fund locally to care for our people. That’s the positive takeaway.
To manage such abrupt changes, organizations must have sustainability measures in place. It is risky to rely solely on one funding source.
For example, organizations entirely dependent on USAID have had to shut down. At IHVN, sustainability is integrated into our operations. While we receive US Government funding, we also access support from non-US donors, research institutions, and local organizations.
Diversifying funding sources is critical to the going concern of not for profit.More importantly, organizations must explore self-sustaining initiatives. Being registered as a Non-Governmental Organization (Limited by Guarantee) does not prohibit business operations, only profit-sharing is prohibited by law.
NGOs can carry out income generating activities within the public health space, reinvest surpluses, and remain compliant with the law. Unfortunately, many NGOs shy away from income-generating activities, for fear of taxation, and non-compliance and risk of deviation from their core mission.
However, the law permits NGOs to plow surpluses back into their programs. These funds can cushion the impact of shocks like funding cuts. At IHVN, we apply this model effectively.
Another key is agility. Organizations must be flexible and responsive. Some have closed; others downsized; some made minimal adjustments and survived. Having internal measures to quickly respond to funding changes is vital.
And finally, collaboration, especially with the Government of Nigeria and other stakeholders, is crucial. At IHVN, we work closely with the Nigerian Government, offering capacity-building and training. We view ourselves as partners working with the government to deliver healthcare services to our people. When the funding issue arose, the Nigerian government stepped in with a $200 million intervention to sustain life-saving programs. Only organizations with strong government ties were positioned to benefit from such measures.
So, to survive disruptions, NGOs need sustainability strategies, diversified funding, operational agility, and strong collaboration with stakeholders.
Could you give a specific example of an initiative in Nigeria where strategic financial planning and donor funding were effectively deployed?
At IHVN, strategic financial planning is applied across all our projects. In fact, we secured our largest grant because of our robust financial management systems, comprising efficient systems, trained personnel, and well documented processes.
The deployment of relevant technology plays a key role in our effectiveness. One notable initiative is the scale-up of antiretroviral (ARV) therapy for people living with HIV in Nigeria. Through donor funding, we provided ARVs at no cost, ensured testing and counseling, and supported patients through community outreach programs.
Beyond direct care, we have also strengthened the broader healthcare system by training healthcare workers, upgrading facilities, and providing capacity building and support to government-owned laboratories.
We help government staff manage financial systems and maintain compliance with donor requirements. Much of this is done pro bono, as a service to our country. These achievements are all thanks to solid financial systems.
Health financing in Nigeria still faces many challenges. What is your advice on expanding access to healthcare through financing, from the government’s perspective?
Health financing in Nigeria is still lacking. With a population nearing 200 million, there’s only so much the federal and state governments can do. Individuals also face limitations; many can’t afford high-quality care, leading them to patent medicine vendors (chemists) or traditional healers.
Government has tried to address these gaps through measures like the National Health Insurance Scheme (NHIS), which covers many formal workers who hitherto had no access to quality healthcare. While this is a good start, coverage gaps still exist, and Government needs to do a lot more.
NGOs like ours help fill these gaps, providing care at no cost to Nigerians, thanks to donor support. We report back to donors, accounting for every dollar.
However, to scale up access, NGOs must strengthen their financial management processes. Unfortunately, many NGOs are built around individuals rather than systems. This limits scalability and trust. Donors want to invest in institutions they can trust to manage funds and deliver impact.
When we started over 20 years ago, we ran a small project with a few thousand dollars. Today, thanks to visionary leadership, strong internal control systems, solid financial management systems and sound board oversight, we now implement about 40 grants from different funding sources. This growth is only possible when NGOs are led by visionary leaders, employ professionals, deploy best in class technologies and are focused on building transparent systems over individual-driven operations.
What innovative tools have you used to manage multiple projects and complex budgets across sectors?
To manage complex accounting and multiple donor requirements, we use several tools. For data and monitoring and evaluation (M&E), we have dedicated systems under our Strategic Information Department (sometimes called M&E in other organizations). For finance, we started with basic tools for single-donor projects. But as our operations grew, so did the complexity. Different donors have different reporting formats and cycles – some monthly, some quarterly.
To manage this, we implemented an Enterprise Resource Planning (ERP) system – an advanced accounting platform. The ERP allows us to treat each donor as a separate “company” within the system.
That way, we can generate separate or consolidated reports easily. Using Excel alone would be too tedious. Every dollar we spend goes through our accounting system, which makes audits easier. We have never had a qualified audit report, even with reviews from multiple donors and auditors.
That said, deploying technology isn’t enough. You need talent to use it. You can have the best system, but if you don’t have the right people trained, skilled, and committed, you are wasting it. We have hired quality staff and invested heavily in training, ensuring our staff stays ahead as technology evolves. So, our financial management success lies in deploying the right technology, hiring capable people, and continuously training them
What is your call to action on financial management in public health?
The funding cut in January was a wake-up call for all, government, NGOs, and private institutions alike. Healthcare provision is a shared responsibility not just the job of the Federal Ministry of Health. I commend private companies that already support health initiatives.
But the funding gap is still wide. More private organizations should support not-for-profits with their resources. Your donation might save a life you will never meet but it matters.
To the government, I would also suggest more incentivized tax policies for companies donating to public health initiatives. While tax burdens are already high, government could grant tax incentives to companies that donate to government approved Not for Profits in the public health sector as a means of encouraging them to donate generously to public health initiatives. That way, companies can reduce their tax burden while supporting the government to provide health to her people by way of corporate social responsibility. This will go a long way in narrowing the public health funding gap.