Published On: Mon, Apr 13th, 2020

Africa’s Healthcare counting the cost of Financing.

 

By Agnes Gitau

As communities across the world grapple with COVID19, All eyes are on Africa healthcare system, being scrutinised for having failed to invest in strong/effective healthcare system. Many analysts predict that the region is likely to suffer the worst of the pandemic despite having registered lower numbers of positive cases and fatalities in comparison to other regions. To date (13/4)  the region has just over 14,000 cases and 793 fatalities according to Africa centre for disease control. There has been  notable efforts by some countries in the region to quarantine, trace , test and  empower communities to mitigate the impact of COVID19, but as numbers rise and infections spread from urban to rural Africa, many are anxious that the pandemic will cripple the already weak system and impact Africa’s human and economic development. 

What is the state of Africa’s Healthcare ?

Back on 2001, realising the importance of a healthy Africa, members of the Africa union met in Abuja and agreed to commit at least 15% of the annual budget to improve health care for each of their citizens, almost two decades after the ( Abuja declaration 2001) https://www.who.int/healthsystems/publications/abuja_declaration/en/. this commitment has been overtaken by many other ‘ declarations’ common place within the Africa Union and despite some notable improvements, only a handful of member states have achieved this commitment, of course led by Rwanda whose health care budget accounts to 20% of its annual budget, South Africa 14%, Ethiopia 3.5 to 5.6%, Kenya 6%, Nigeria below 4%.  Only a handful of countries can afford $34 to $40 per year per person that WHO considers for the basic healthcare leaving the continent very exposed.  IFC estimates that the region requires at least $66 Billion to fill the gap in the healthcare system. The investment could be directed to:

  • Better production facilities and distribution/retail systems for pharmaceuticals and medical supplies
  • About 90,000 physicians, 500,000 nurses, and 300,000 community health workers
  • Over half a million hospital beds

A further blow to the continent, is the dual-disease burden’ of both Communicable Diseases (HIV/AIDS, Ebola etc) and Non-Communicable Diseases (Diabetes, Heart disease, Cancer). With rising economies and urbanization, non-communicable diseases (NCDs) present new challenges to Africa’s emerging health systems. For example, NCDs like diabetes and heart disease are now responsible for at least 40% of deaths in South Africa. In just over a decade, such diseases are projected to be the leading cause of mortality in Africa. https://www.weforum.org/agenda/2018/01/africa-lead-healthcare-fourth-industrial-revolution. 

What were individual countries doing even before COVID 19 ?

Private Healthcare Financing in Africa.

Despite efforts by a number of countries to provide healthcare, a majority of Africans finance health care privately, recent reports indicate that restrictions on travel, border closures due to COVID19 means that African billionaires who would never go to hospitals in Africa are stuck and have had to seek help from these weak facilities like any other African. 50% of Africa’s health care financing is out of pocket as many Africans are left with no choice but to seek healthcare wherever it is available at whatever cost, this has pushed many to poverty.

But as Governments make efforts towards healthcare provision, private financial investors to compliment these efforts will be key to lifting the healthcare infrastructure, those the disposable income.

A growing number of Africa with disposable income are driving demand for private health care in some countries.This has attracted private equity and debt investors with an interest in this sector. The  $1 billion Africa healthcare fund that was established by IFC in 2008 has attracted investors from DEG, Gates foundation, AFDB etc. The Fund managed by Aurerios capital invests in:
 Health services (clinics, hospitals, diagnostic centers, labs)
 Risk pooling and financing vehicles (health management organizations, insurance companies)
 Distribution and retail organizations (eye clinics, pharmaceutical chains, logistics companies)
 Pharmaceutical and medical-related manufacturing companies
 Medical education
 Providers of medical education

If anything positive is to come out of the COVID19 pandemic, I hope it will be an investment in Africa’s health care, a combination of both public and private sector to ensure universal health care coverage for everyone.

@agnesgitau is the Managing partner at GBS Africa, a boutique Africa focused advisory firm.

 

 

 

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