A safety man administers sanitiser to a customer to a state hospital in Lagos, on February 28, 2020.
PIUS UTOMI EKPEI | AFP through Getty Images
The coronavirus pandemic has sharpened the lens on a considerable health-care spending gap in Africa’s largest economic system, and worldwide investors are searching for to fill the void.
When it comes to well being care, Nigeria is lagging its comparable African neighbors when it comes to expenditure and entry.
For instance, Nigeria’s public spending on well being care quantities to simply 3.89% of its $495 billion GDP (gross home product), in accordance to the newest out there figures from the World Bank, in contrast to 8.25% in South Africa and 5.17% in Kenya.
According to a latest report from actual property consultancy Knight Frank, Nigeria would require 386,000 extra beds and $82 billion of funding in health-care actual property property to attain the worldwide common of two.7 beds per thousand individuals.
Also, Nigeria’s 206 million inhabitants is predicted to nearly double by 2050, in accordance to the U.N., which might see it change into the third-most populous nation on this planet.
All of this — particularly mixed with the coronavirus pandemic — has sparked an curiosity within the sector from international investors.
A Knight Frank ballot of 140 world investors in June discovered that 80% had been contemplating funding in African well being infrastructure in gentle of the coronavirus disaster. This curiosity centered primarily round hospital-related actual property and working corporations in collaboration with home consultants.
As is the case throughout a lot of the African continent, Nigeria has managed to maintain its coronavirus caseload comparatively low given the dimensions of its inhabitants, recording 90,080 instances and 1,311 deaths as of Monday morning, in accordance to information compiled by Johns Hopkins University.
Even prior to the pandemic, African health-care property had begun to generate curiosity extra broadly. The International Finance Corporation, a part of the World Bank, partnered with the Investment Fund for Health in Africa-II (IFHA-II) in November 2019 to type a $115 million acquisition automobile for health-care service companies within the east and south of the continent.
European improvement finance organizations reminiscent of Swedfund, the Swedish improvement finance establishment, have backed IFHA, together with the likes of Pfizer and the Stichting Social Investor Foundation for Africa, whose backers embrace Aegon, Heineken, Shell and Unilever amongst others.
Since the onset of the pandemic, the Nigerian authorities has issued 100 billion naira ($254.6 million) in state credit score services for well being care, from pharmaceutical corporations and product producers to service suppliers, which has seemingly spurred larger curiosity from personal investors. The Bank of Industry, a Nigerian improvement finance establishment, is supplying an additional 50 billion naira.
“There is a very compelling opportunity for the development of world-class healthcare facilities across Africa, but especially Nigeria,” mentioned Hafeez Giwa, managing accomplice at HC Capital Properties, which has began to put money into health-care property in Nigeria.
Hafeez Giwa, managing accomplice at HC Capital Properties, has begun to put money into Nigerian well being care infrastructure.
New Markets Media & Intelligence
“Most of the public hospitals here were constructed over 40 years ago and only a handful have received any investment since then,” Giwa mentioned in a report printed Monday by frontier markets consultancy New Markets Media & Intelligence.
Tosin Runsewe, CEO at health-care funding agency AfyACare Nigeria, highlighted one other alternative: compulsory medical insurance for federal staff would see insurance coverage prices lowered and the share of health-care prices lined may rise to between 20% and 30% by 2030.
As it stands, round 72% of family health-care expenditure is out-of-pocket, in contrast to the sub-Saharan common of 35%, the Knight Frank report highlighted, and solely 5% of well being care is roofed by insurance coverage.
“If we could attain a critical mass of 40 million to 60 million Nigerians with healthcare cover, the cost of this treatment could be met through health insurance premiums of around only 20,000 Naira ($50) a year, half the current average cost,” Runsewe mentioned.
“There is an array of opportunities for investors in private primary healthcare clinics that can provide services at an affordable cost.”
Commuters carrying a protecting face masks stroll on the road of Lagos, as a safety measure towards the unfold of the brand new corona virus, COVIC-19, in Lagos, on March 26, 2020.
Giwa mentioned HC Capital Properties was investing in Nigeria due to each “extreme need” and authorities initiatives which have rendered it simpler to develop high-quality property that provide reasonably priced care. He recommended that there are two varieties of investors presently exploring these alternatives.
“On the one hand, there are local institutional investors and local pension funds that, in Nigeria’s case, are Naira investors and do not have any concerns about currency risk,” Giwa mentioned.
“On the other hand, there are development impact investors and institutions that are excited by the prospect of delivering high-quality healthcare to lower- and middle-income Nigerians.”
He anticipates that the pandemic has caused a “permanent change in thinking” which can place larger emphasis on high quality well being care at house.
At current, Nigeria loses up to $1 billion per 12 months to outbound well being tourism amongst wealthier Nigerians due to insufficient home entry, in accordance to a latest PwC report.