# The effects of decentralized financing and funding levels on the breadth of services and structural quality to provide those services in primary health facilities in Nigeria

## TL;DR

This study examines how different financing approaches and funding levels affect the quality and range of services in Nigerian primary health facilities.

## Contribution

The paper provides empirical evidence on the effectiveness of performance-based and decentralized financing in improving primary health care in Nigeria.

## Key findings

- PBF facilities showed the highest service availability, while DFF outperformed controls on most measures.
- Both structural readiness and service offerings increased with higher funding, especially under DFF.
- PBF and DFF improved service breadth and quality, with DFF performance being more sensitive to funding levels.

## Abstract

To improve service delivery of Nigeria’s primary health care (PHC) system, the government tested two approaches for facility-level financing: performance-based financing (PBF) and decentralized facility financing (DFF). Facilities also had increased autonomy, supervision, and community oversight. We examine how the intervention approach and funding level affected breadth of services and structural quality.

We use health facility surveys previously collected in 2014 and 2017, covering three years of implementation, in which districts were randomly assigned PBF or DFF and compared to matched districts in control states. We use log-linear regressions and non-parametric statistics to estimate the effect size of the financing approach and level of funding per capita.

Service availability was highest in PBF facilities, while DFF also outperformed control on most measures. Results showed that structural readiness and service offerings both increased with more funding, especially under DFF. DFF and PBF facilities were better equipped to provide services that they claimed to offer, which was not the case for controls. Overall, PBF outperformed DFF, partially explained by funding levels. The rate of offering complimentary services followed a pattern of easiest-to-hardest to deliver.

PBF and DFF both improved the breadth and structural quality of services, although DFF performance was more sensitive to funding levels. Improvements were observed at relatively low levels of funding, but larger investments were associated with better performance. Most DFF facilities exceeded the performance of higher-funded controls, implying that funding was more valuable in the context of autonomy, increased supervision, and community oversight.

The online version contains supplementary material available at 10.1186/s12913-025-12512-3.