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TRANSFORMING AFRICA’S HEALTHCARE: Private Sector to convene in Ethiopia for the African Business: Health Forum

TRANSFORMING AFRICA’S HEALTHCARE: Private Sector to convene in Ethiopia for the African Business: Health Forum

On 12 February, African leaders and business heavyweights, will meet in Addis Ababa – Ethiopia for the African Business: Health Forum (AB:HF), at which they will discuss and seek solutions to Africa’s health challenges. This feature examines what is at stake and presents the views of the events initiators, who include prominent businessman Aliko Dangote, founder of Access Bank and co-chair of GBCHealth Aigboje Aig-Imoukhuede and the UN Economic Commission for Africa  (UNECA) Executive Secretary, Vera Songwe.

By historic and global standards, the advances made in health in Sub-Saharan Africa since 1980 have been nothing short of staggering. People are living much longer and access to vaccinations has massively reduced death rates from infectious diseases. Yet life expectancy and particularly healthy life expectancy still lag far behind that of the rest of the world, so there is a great deal more that can be achieved…

Africa accounts for the bulk of the global infectious disease burden with about 75% of the HIV/AIDS pandemic, 90% of the malaria cases and deaths. In addition to the pandemics and other uniquely African infectious diseases, it is estimated that by the year 2020 Africa could have 60 million people with hypertension, 1 million cases of cancer annually and 18.6 million people with diabetes. Along with the specific conditions, there will be an expected explosion of other cardiovascular conditions, chronic respiratory diseases and neuro-psychiatric conditions.

Africa remains dependent on imported medicines and other health technologies – a risky situation in a continent with the world’s highest prevalence of HIV. The 7.6 million Africans living with HIV now on antiretroviral treatment (with millions more yet to be identified) depend on 80% of antiretroviral medicines being imported from outside the continent. The local production of medicines and other essential health commodities is important for all health challenges faced by the continent. Demand for health commodities is growing rapidly. The ageing population in Africa requires access to a growing range of medicines and assistive technology that cannot be met with Africa’s existing manufacturing capacity and sources of supply.

Africa will have 2 billion people in 2050 -one fifth of the global population, the largest and youngest workforce by 2025 and over 500 million people in the labour market. Successfully absorbing this workforce in labour-intensive and highly productive activities/sectors (e.g. manufacturing, technologies, service delivery) holds the key to creating Africa’s demographic dividend.

Africa has the highest urbanization rate in the world. About 40% of the population already live in urban areas and the 20 largest African cities are expected to grow by 50% in the next 10 years. This represents opportunities in infrastructure development and services.

Growing populations and rapid urbanization will result in the rise of a middle class. In 2010, 150 million Africans made up the middle class, a figure that is expected to reach 210 million in 2020 and rise to 490 million by 2040. The rise of the middle class has caused a shift in consumption patterns with its members preferring consumer goods (finished and manufactured products) as well as buying in supermarkets or similar set ups.  This is a market worth USD250bn that is set to grow at an annual rate of 5% over the next 8 years.

In 2016, mobile technologies and services generated USD 110 billion of economic value in Sub-Saharan Africa, equivalent to 7.7% of GDP It is expected to rise to USD 42 billion or 8.6% of GDP, by 2020 as countries benefit from improvements in productivity and efficiency brought about by increased take-up of mobile services. The mobile ecosystem accounted for approximately 3.5 million jobs in Sub-Saharan Africa in 2016. The number of mobile broadband connections will reach half a billion by 2020, more than double the number at the end of 2016. African economies have been resilient and gaining momentum. Real output growth is estimated to have increased 3.6 percent in 2017 and to accelerate to 4.1 percent in 2018 and 2019. Overall, the recovery of growth has been faster than envisaged, especially among non-resource–intensive economies.

But challenges remain, especially for the structural transformations that would create more jobs and reduce poverty, improve the health of its citizens and literacy levels. Agenda 2063 aspires that by 2063, Africa shall be a prosperous continent, with the means and resources to drive its own development, with sustainable and long-term stewardship of its resources and where African people have a high standard of living, and quality of life, sound health and well-being.

The continent currently has 400 companies with revenue of more than $1 billion per year, and these

companies are growing faster and are more profitable in general than their global peers. Coupled with these fast-moving regional leaders, small and growing businesses create 80% of the continent’s employment and are stoking the engines of growth.

The Africa Business: Health Forum (ABHF), is championed Aliko Dangote, GBHHealth’s Aigboje Aig-Imoukhuede and the ECA’s Executive Secretary, Vera Songwe.

A quarter of economic growth between 2000-2011 in low and middle income countries worldwide is attributed to better health, while each extra year of life expectancy increases GDP per capita by 0.1% according to figures from a report that will be launched by the United Nations Economic Commission for Africa (ECA) at the Africa Business: Health Forum (ABHF), an initiative being launched and championed by two African business heavyweights, Aliko Dangote, Africa’s most successful businessman, and Aigboje Aig-Imoukhuede, leading financier, founder of Access Bank and co-chair of GBCHealth, as well as by the ECA’s Executive Secretary, Vera Songwe. To help prioritise government spending on health, it is vital to promote the message that health – as with education – is a productive sector that contributes to growth and development.

Footing the bill

The WHO estimates Africa’s share of the global health burden at 25%, far higher than its 15% share of global population, yet its ability to finance healthcare is much lower.

As ever, one of the big questions is whether healthcare should be free and, if not, which services people should pay for. With so many other demands on their resources, it can be difficult for governments to finance more than a small proportion of even basic health services or to tackle unexpected emergencies, such as Ebola crises in Democratic Republic of Congo and the Mano River states, or the December 2018 cholera outbreak in Zimbabwe. At same time, the scale and direction of donor funding is subject to the whims of politicians and shrinking budgets in countries beyond Africa.

According to the ECA report, total health expenditure as a proportion of GDP increased in 29 African countries between 2000 and 2015, and fell in just 13, while the number of countries spending more than $44 per capita per year jumped from 15 to 31 over that period. Unsurprisingly, the five biggest spenders on health – Mauritius, South Africa, Algeria, Botswana and Namibia – are among the continent’s most wealthy nations.

The WHO estimates that investing $21-36 per capita per year for five years in Africa would save 3.1m lives, including 2.8m mothers and children. Moreover, it is important not to assess spending priorities in isolation. Education spending also translates into improved health outcomes, as higher adult literacy rates translate into lower maternal and child death rates.

The 2001 Abuja Declaration called for 15% of all state spending to be allocated to health but Botswana, Rwanda, Zambia, Madagascar and Togo are the only countries to have met this figure. Nigerian health spending peaked at 5.95% of total expenditure in 2012 and fell to just 3.9% in the proposed budget for 2019. It is clear that governments alone will not be able to carry burden, and it is with this in mind that the three founders of the ABHF are putting out a rallying call for greater private sector engagement around health.

Benefits of the private sector

The climate for private sector health investment in Africa has never been better, with Sub-Saharan African countries re- cording an unbroken pattern of economic growth in the past few years. Ironically, the challenges created by a lack of adequate infrastructure, human capacity and poor-quality healthcare have given rise to favourable conditions for the redesign of healthcare delivery models in the African context which will further bolster the upward march of Africa’s economic prosperity.

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Written by African Business Magazine

African Business and its award-winning team is widely respected for its editorial excellence. We provide the all important tools enabling you to maintain a critical edge in a continent that is changing the world. Our special reports profile a wide range of sectors and industries including Energy, Oil and Gas, Aviation, Agriculture to name but a few.

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