Vunderkind
Social Member
By Ike Chioke
A financial windfall in the health sector can only be a reality if healthcare evolves from a social concept to a business opportunity. This ideology can be revamped with the design of policies that rapidly incorporate investment prerogatives into key segments of the healthcare industry while providing a conducive environment for investors.
Did you know?
The African continent has 6 out of the 10 fastest growing economies in the world and is a vital player in the global resource space. Ironically, the continent has the highest disease burden in the world. To further narrow the scope, Sub-Saharan Africa makes up 11.0% of the world’s population but accounts for 24.0% of the global disease burden according to the International Finance Corporation (IFC).
Grappling with rising population, Africa has significantly low health care spending, government-run facilities are far from cutting edge, skilled health workers and vital medicines are in short supply, and there are persistent geographical disparities between urban and rural settlements.
Advocating an Investment Perspective for Healthcare Delivery
In a bid to address these challenges in healthcare and in line with the Millennium Development Goals (MDGs), 53 African countries signed the Abuja Declaration, pledging to devote 15.0% of their annual budgets to healthcare. However, while a universal fiscal coverage may be the best solution, the associated cost burden leaves the government significantly out of pocket.
Concurrently, private participation in African economies, i.e. Ghana, Gambia, South Africa, India etc. has improved significantly within the last decade with the emergence of health insurance schemes These schemes, however, cover a miniscule percentage of the population, e.g. India currently has a population of 1.2 billion and a scheme that covers approximately 240 million citizens (i.e. 19.0% of the population) while the state spends 4.0% of GDP on health. Nigeria has a population of 170 million, a health scheme that covers approximately 20 million citizens, i.e. 11.8% of the population, which is privately and publicly funded and allocates 6.1% of the budget to the health sector.
To fast track development processes, it is believed that the development of a vibrant healthcare delivery system cannot be possible without an effective workforce. Hence, private institutions are advised to partner with leading health advocacy organizations to equip healthcare workers and civil society groups with skills to deliver quality health care services. One of such partnerships can be gleaned from Afrinvest’s role in partnering with Friends Africa to train well over 60 Grassroots NGOs from 26 African countries during its Grassroots NGO Capacity Building Seminar in Accra, Ghana.
Healthcare Financing Gaps and Investment Opportunities
The healthcare financing system in Africa is poor, to say the least. As already established, public spending on health is insufficient, and international donor funding is becoming increasingly difficult to sustain in the current global economic climate. However, the opportunities for private sector health investment in Africa have never been better, with Sub-Saharan African countries recording an unbroken pattern of economic growth in the past few years.
The healthcare market is large and diverse, with a value chain comprised of equipment manufacturers, pharmaceutical companies, distributors & retailers, health service providers, health financing entities, and medical education providers. The entire value chain is in need of investment and areas where growth is likely to boom include but are not limited to the following:
Primary care – Rising population and largely underserved areas make this a good investment option.
Hospitals – Several business models exist for this from management contracts to joint ventures with local, public, or private entities to wholly foreign ownership of new and existing facilities.
Specialist Care Facilities – There is a dearth of centers for specialized care treatment like Assisted Fertility, Orthopaedics, Burns, Cancer Care, etc.
Technology & Information Systems – Given the size of the continent and shortage of skilled health workers, telemedicine can help bridge the gap in healthcare and good information management systems are key to better clinical care coordination, hospital administration and resource management.
Looking Forward
It is estimated that Sub-Saharan Africa’s healthcare market will spike to $35.0bn by 2016. This figure is set to increase even further in the years ahead, fuelled by both domestic and international investments as well as an ever-increasing demand for healthcare.
The transformation of the African healthcare system into a more viable industry ought to be driven by consistent structural and socio-political reforms over a sustained period. Policy-makers would have to take a cue from other emerging and developed economies, such as India, Brazil and the U.K. on how to tackle healthcare challenges at the institutional level and at the grassroots.
In addition, the relationship between the public and private sectors should be enhanced through a combination of drastic reforms that create a burgeoning market for investors, while placing health care at the core of development. We are certain that a combination of these steps will leapfrog investment in health and lead to quality healthcare delivery for Africans.
Ike Chioke is CEO of Afrinvest West Africa Ltd.
.
A financial windfall in the health sector can only be a reality if healthcare evolves from a social concept to a business opportunity. This ideology can be revamped with the design of policies that rapidly incorporate investment prerogatives into key segments of the healthcare industry while providing a conducive environment for investors.
Did you know?
The African continent has 6 out of the 10 fastest growing economies in the world and is a vital player in the global resource space. Ironically, the continent has the highest disease burden in the world. To further narrow the scope, Sub-Saharan Africa makes up 11.0% of the world’s population but accounts for 24.0% of the global disease burden according to the International Finance Corporation (IFC).
Grappling with rising population, Africa has significantly low health care spending, government-run facilities are far from cutting edge, skilled health workers and vital medicines are in short supply, and there are persistent geographical disparities between urban and rural settlements.
Advocating an Investment Perspective for Healthcare Delivery
In a bid to address these challenges in healthcare and in line with the Millennium Development Goals (MDGs), 53 African countries signed the Abuja Declaration, pledging to devote 15.0% of their annual budgets to healthcare. However, while a universal fiscal coverage may be the best solution, the associated cost burden leaves the government significantly out of pocket.
Concurrently, private participation in African economies, i.e. Ghana, Gambia, South Africa, India etc. has improved significantly within the last decade with the emergence of health insurance schemes These schemes, however, cover a miniscule percentage of the population, e.g. India currently has a population of 1.2 billion and a scheme that covers approximately 240 million citizens (i.e. 19.0% of the population) while the state spends 4.0% of GDP on health. Nigeria has a population of 170 million, a health scheme that covers approximately 20 million citizens, i.e. 11.8% of the population, which is privately and publicly funded and allocates 6.1% of the budget to the health sector.
To fast track development processes, it is believed that the development of a vibrant healthcare delivery system cannot be possible without an effective workforce. Hence, private institutions are advised to partner with leading health advocacy organizations to equip healthcare workers and civil society groups with skills to deliver quality health care services. One of such partnerships can be gleaned from Afrinvest’s role in partnering with Friends Africa to train well over 60 Grassroots NGOs from 26 African countries during its Grassroots NGO Capacity Building Seminar in Accra, Ghana.
Healthcare Financing Gaps and Investment Opportunities
The healthcare financing system in Africa is poor, to say the least. As already established, public spending on health is insufficient, and international donor funding is becoming increasingly difficult to sustain in the current global economic climate. However, the opportunities for private sector health investment in Africa have never been better, with Sub-Saharan African countries recording an unbroken pattern of economic growth in the past few years.
The healthcare market is large and diverse, with a value chain comprised of equipment manufacturers, pharmaceutical companies, distributors & retailers, health service providers, health financing entities, and medical education providers. The entire value chain is in need of investment and areas where growth is likely to boom include but are not limited to the following:
Primary care – Rising population and largely underserved areas make this a good investment option.
Hospitals – Several business models exist for this from management contracts to joint ventures with local, public, or private entities to wholly foreign ownership of new and existing facilities.
Specialist Care Facilities – There is a dearth of centers for specialized care treatment like Assisted Fertility, Orthopaedics, Burns, Cancer Care, etc.
Technology & Information Systems – Given the size of the continent and shortage of skilled health workers, telemedicine can help bridge the gap in healthcare and good information management systems are key to better clinical care coordination, hospital administration and resource management.
Looking Forward
It is estimated that Sub-Saharan Africa’s healthcare market will spike to $35.0bn by 2016. This figure is set to increase even further in the years ahead, fuelled by both domestic and international investments as well as an ever-increasing demand for healthcare.
The transformation of the African healthcare system into a more viable industry ought to be driven by consistent structural and socio-political reforms over a sustained period. Policy-makers would have to take a cue from other emerging and developed economies, such as India, Brazil and the U.K. on how to tackle healthcare challenges at the institutional level and at the grassroots.
In addition, the relationship between the public and private sectors should be enhanced through a combination of drastic reforms that create a burgeoning market for investors, while placing health care at the core of development. We are certain that a combination of these steps will leapfrog investment in health and lead to quality healthcare delivery for Africans.
Ike Chioke is CEO of Afrinvest West Africa Ltd.
.
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