Turning Africa’s health challenges into investment opportunities
Africa’s leaders gathered in February 2019 to launch ABCHealth, a new initiative aimed at harnessing and catalyzing private sector investments towards achieving universal health coverage and ensuring attainment of the ambitious Sustainable Development Goals (SDG) 3 health targets and the aspirations of Africa’s Agenda 2063. The Coalition presents an opportunity to rewrite the African narrative in health by pooling private sector expertise, resources, assets and capabilities to accelerate positive health outcomes in the region.
Health challenges in Africa
That Africa confronts a health crisis of overwhelming proportions is widely understood. The spread of HIV/AIDS, the insidious scourge of malaria, the increasing mental health cases and the persistence of debilitating parasitic diseases are all well documented. Increasingly, so-called lifestyle ailments— cancer, diabetes, and heart disease—are also afflicting Africans. Furthermore, the region frequently battles deadly epidemics such as Ebola, Cholera, Yellow fever and Lassa fever; chronic humanitarian crises and climate-associated disasters such as cyclones and mudslides that not only have severe public health consequences but also negatively impact on the social fabric of the society as well as economic growth. Compounding the continent’s health crisis is the poor state of its health systems, which are ill-equipped to cope with these challenges. As a result, these ailments sap the energy, creativity and productivity of the region’s over 670 million people.
According to the World Health Organization (WHO), Africa carries 25% of the world’s disease burden but its share of global health expenditures is less than 1%. Worse still, it manufactures only a fraction—less than 2%—of the medicines consumed on the continent. Only thirty seven (37) out of fifty four (54) African countries have some level of pharmaceutical production. Resultantly, the price of medicines in Africa, where the need is greatest and the poverty is worst, is often higher than in Europe and North America. A recent BBC article noted that African countries ‘pay 30 times more’ for medicines. Outbound medical tourism costs Africa billions of dollars with, Nigeria alone spending over US$1billion each year. There is a concerning reliance on direct out-of-pocket payments in many African countries, accounting for an average of 36% of current health expenditure. Africa has seen the fastest increase in the numbers of people who spent at least 10% of their household budgets on healthcare. The reality is that if millions of people are being impoverished by health expense, achieving universal health care remains a delusion. To reverse current trends, experts maintain that the private sector should complement government efforts.
Healthier is wealthier
A healthy nation is a wealthy nation. It goes without argument that healthy populations are critical for Africa’s long-term economic growth, increasing economic gains through raised productivity, job creation and the promotion of equality. Aig Aigboje Aig-Imoukhuede Chair ABCHealth said “Fix health fix Africa” as investment in health will translate into hundreds of billions of dollars per year of additional income, which could be used to improve living conditions and social infrastructure. Investments in the health sector are likely to have considerable benefits—both from the perspective of economic gain and lives saved. In addition to making good economic sense, these investments will help African countries fulfill their commitments to the fundamental values of safeguarding human health and life, commitments that are the bedrock of our societies today.
Investment opportunities for private sector
Africa’s health-care systems require significant investments to meet the needs of their populations and to address changing patterns of ill health across the continent. Instead of focusing on governments as the major financers and providers of health care, the priority is to encourage private-sector initiatives whose goal is “to provide affordable access to high quality health care for Africans. The climate for private sector health investment in Africa has never been better, with Sub-Saharan African countries recording an unbroken pattern of economic growth in the past few years. Led by Aliko Dangote, a new cadre of responsible business leaders and philanthropists has emerged that understand the value and promise of sustainable large-scale investments in African countries. Business opportunities in the health care and wellness sector in Africa are estimated to be worth $259 billion by 2030, with a potential to create 16 million jobs. By 2030, business opportunities in health and wellness sector will reach $2 trillion in current prices. “Healthier populations enable healthier economies…The impact of unlocking the health of our estimated 1.1 billion workers by 2040 and our estimated $2 trillion consumer market by 2025 will clearly change the trajectory of Africa,” Aliko Dangote.
The African healthcare market is large and diverse, with a value chain comprised of manufacturers, health service providers, retailers, distributors, health financing entities, and medical education providers. The entire value chain needs investment, key areas to note include the following:
Health Equipment Investment
- Investments in medical equipment and diagnostics equipment
- Supply of health infrastructure equipment
- Manufacture of medical devices
Health Product Investments
- Increasing trends in communicable and non-communicable diseases coupled with insufficient provision of vital health products like vaccines and vital medicines will create business opportunities for drug manufacturers
- Good opportunity for life science and pharmaceutical companies
Health Technologies
- Health information systems and health records management
- Systems to generate, validate and analyse health information
- ICT solutions for the health sector
Health Sector Financing
- Infrastructural projects-building and upgrading of health centers and hospitals
- External sources of financing from philanthropic, bilateral and multilateral sources
Investors are welcome to pitch in any of these areas that complement one another
Rewriting the African health narrative
ABCHealth is leading the private sector narrative as the continent rewrites its health annals. Through the Coalition, private sector is leading the effort to explore, assess, and implement complementary mechanisms and approaches to health investments. Through this platform private sector resources are being leveraged more efficiently and equitably for health.
Join the movement, join ABCHealth-it is time to change the African narrative.
A quarterly publication focusing on different aspects of the Business of Health in Africa
About the author.
Mercy Machiya is the Acting CEO ABCHealth.
Look out for the next issue….
