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Private sector rallies around transforming healthcare in Africa.

In February African leaders will meet in Addis Ababa to discuss new ways to solve Africa's health challenges. In this feature, we look at what these are and speak to two founders of the Africa Business: Health Forum (ABHF).

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 60m people with hypertension, 1m cases of cancer annually and 18.6m 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 7.6m Africans living with HIV now on antiretroviral treatment (with 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 2bn people in 2050 --one fifth of the global population, the largest and youngest workforce by 2025 and over 500m 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 urbanisation 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 urbanisation will result in the rise of a middle class. In 2010, 150m Africans made up the middle class, a figure that is expected to reach 210m in 2020 and rise to 490m 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 250bn [pounds sterling] that is set to grow at an annual rate of 5% over the next eight years.

In 2016, mobile technologies and services generated $110bn of economic value in sub-Saharan Africa, equivalent to 7.7% of GDP. It is expected to rise to $42bn 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 3.5m 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 are gaining momentum. Real output growth is estimated to have increased 3.6% in 2017 and to accelerate to 4.1% 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 $1bn 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.

A quarter of economic growth between 2000-11 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.


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 the ebola crises in Democratic Republic of Congo and the Mano River states. At the 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 144 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 $21-136 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 the 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.


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. 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.

The Africa Business: Health Forum will take place at the Hyatt Regency, Addis Ababa, on February 12th. For more information visit www.


By fixing health, we fix Africa!

As co-chair of GBCHealth, what inspired you to launch the African Business Coalition on Health?

African healthcare systems face serious challenges which constrain access to affordable quality healthcare with negative morbidity and mortality implications. One troubling issue that is never far from my thoughts is the inequality of life Africans are subjected to from the health perspective. Why is it that the probability of a black man dying in Africa is much higher than that same black man dying in Europe or America? I find this reality unacceptable.

With the insights I have gained as an Africa-focused entrepreneur and manager I know that we cannot leave responsibility for a healthy African population to government alone--it would be overwhelming. Africa's private sector, with its rapidly growing power and influence, must be encouraged to collaborate with the public sector and fix our health sector.

Africa accounts for the bulk of the global disease burden yet we remain dependent on imported medicines and technologies and external capital. It is time for the African private sector to step up to the plate.

What role can you expect the private sector to play in providing solutions?

By fixing health, we fix Africa! An appropriate, robust and sustainable model for improvements in health system performance is essential in order to reverse the declining trends in health and development status and break the vicious cycle of poverty and ill-health in Africa.

I am calling on the African private sector to see investment in the continent's health systems as an opportunity to accelerate economic development and growth, contribute to saving lives and preventing life-long disabilities. By leveraging its resources, expertise, networks, infrastructure and assets, the private sector can focus on innovation for new technologies, systems and processes, influence policy and form partnerships that will have continent-wide impact regarding population health.

How can ABCHealth help the private sector be more active in this field and work hand-in-hand with government to develop solutions?

The ABCHealth initiative seeks to collectively mobilise private sector resources, expertise and innovation to strengthen health systems and save lives across the continent. Many corporates are already offering their assets, infrastructure, supply chains, mobile health channels and expertise to save lives. The coalition will be a platform that enhances the coordination and alignment of these efforts.

ABCHealth will have five primary objectives over its first three years: to incubate partnerships on priority health programmes; work directly with companies to optimise workplace and community health programmes; advocate for policies and initiatives that drive system-level changes; create a hub of data and insights specific to Africa and African business; and create leadership events to convene and drive action around common health issues, across sectors to mobilise leadership at the national, regional, and global levels, to support national health systems in Africa in their efforts to increase the pace and sustainability of achieving better health and economic development outcomes for the people of Africa.


Private sector needs to fill health spending gap

Does the ECA believe that there needs to be much wider stakeholder involvement in healthcare?

Yes, very much so. Indeed, the need for the improved involvement of non-state actors including the private sector in health provision is in adherence to the 2030 Agenda on Sustainable Development. Total spending on healthcare in Africa has remained within a narrow band of 5-6% of GDP in 200015, on average, though in per capita terms it has almost doubled from $150 to $292 (in constant PPP dollars).

However, the sources of health financing remain largely government and donor funding that on average make up about 55-57% of the total spending on health. We estimate that governments in Africa need to spend an additional $66bn per year to ensure coverage of a basic package of services for 90% of their populations. On average, countries need to more than double their current public spending levels to meet this target.

The role of the private sector in health care in filling this gap is important. Currently, the extent of prepaid private spending on health is still very low, out-of-pocket funding remains the largest component (36%) of total healthcare spending in Africa. A more systemic role for the private sector alongside public provision is necessary to tackle the health status of African peoples.

You will be launching the Healthcare and Economic Growth in Africa report. What are the main conclusions?

Health expenditure is positively correlated with GDP per capita and infant mortality. A 40% increase in health expenditure per capita is sufficient to increase real GDP per capita by 1% and a 1% increase in GDP per capita leads to a 0.19% fall in infant mortality rates.

The average heath budget in Africa at between 5 to 6% of GDP is insufficient to address the healthcare needs. The financing gap of $66bn annually points to a medium and long-term opportunity for the private sector to innovate around products, value chains, health systems infrastructure and contribute to bridging the health financing gap. Companies that engage a broad and more diverse spectrum of available financing options for global health will be well-positioned in the years to come to maximise impact.

From a policy perspective, what are a few key issues the report focuses on?

From a policy perspective, there are three areas of focus. The first is improving efficiency and government allocations of spending on healthcare given increasing demand, changing demographic structures and equity of health outcomes.

Secondly we need to improve regulation to crowd in the private sector into features of health care provision. The private sector participation can be through insurance schemes, health infrastructure investments such as clinics, hospitals, production of health personnel.

And last we need to scale up Public-Private Partnerships (PPPs). For example, in Ghana the five PPPs engaged in service delivery interventions were reviewed and the impact showed an improved health needs based approach and an enhanced monitoring and evaluation of expenditure against outcome and a strengthened commitment to mobilise additional resources.

Caption: A doctor examines a cut on a young boy's head at a hospital run by Dr Hawa near Mogadishu in Somalia. Studies by organisations like UNECA confirm that strengthening the continent's health systems would not only promote better health and help save lives, but accelerate economic development and growth

Caption: A dermatologist in Bamako, Mali, examines a patient on his mobile phone, using an online platform enabling treatment advice. The gap between public spending and public health needs in Africa presents an opportunity for the private sector--innovations around products, value chains and health systems infrastructure can help to bridge the health financing gap
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Title Annotation:Even Communique
Publication:New African
Geographic Code:60AFR
Date:Feb 1, 2019
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