With foreign funding for healthcare declining, pension funds and other domestic investors have been urged to put more money into Nigeria’s healthcare sector to help close the country’s growing financing gap.

The call was made at a private markets and healthcare roundtable organised by HealthCap Africa in Lagos, where pension fund managers, regulators, development finance institutions, healthcare investors and operators examined ways to mobilise more private capital for healthcare.

The meeting, with the theme ‘Healthcare as an Asset Class,’ identified pension funds as one of the biggest pools of domestic capital that could be used to finance healthcare infrastructure and businesses.

Representatives of pension funds at the event came from institutions collectively managing more than $5 billion in assets, highlighting the scale of capital that could potentially be directed towards the sector.

The participants noted that the decline in funding from the United States Agency for International Development (USAID) and other foreign assistance programmes had made it more urgent for Nigeria and other African countries to develop stronger domestic sources of healthcare financing.

Africa carries about 22 per cent of the world’s disease burden but receives only about one per cent of global health spending, leaving an estimated $1.1 trillion annual healthcare financing gap.

According to them, Africa could no longer depend mainly on foreign aid to fund healthcare, stressing the need for government, pension funds, insurers, development finance institutions, philanthropists and private investors to play complementary roles.

The stakehokders stressed the need for the Securities and Exchange Commission (SEC), National Pension Commission (PenCom), fund managers and other institutional investors to develop investment products that would allow pension funds to participate in healthcare while protecting the savings of contributors.

They also called for more investment in early-stage healthcare businesses, noting that many promising projects struggle to attract the right type of capital because investors often focus on later-stage opportunities.

In addition, the participants said the development of healthcare investment products should go beyond raising money, stressing that investment must also support the growth of strong healthcare businesses that can eventually access the public capital market.

Nigeria has a significant base of private-market activity to build on. Between 2021 and 2025, the country recorded 513 Seed+ deals, accounting for more than a quarter of Africa’s early-stage investment activity, while five of Africa’s eight unicorns are based in Nigeria.

Therefore, the stakeholders urged regulators, pension fund managers, investors and healthcare operators to deepen cooperation and develop transparent and well-governed investment structures that can channel more domestic capital into healthcare.

In her remarks, Founder and General Partner of HealthCap Africa, Dr. Ola Brown, said the experience of India showed what sustained private investment could achieve in healthcare.

Brown pointed to Quadria Capital, one of Asia’s major healthcare-focused investment firms, which has raised more than $1 billion and has assets under management of over $4 billion.

She said the scale of investment in India should encourage African investors to consider what specialised pools of capital could achieve in the continent’s healthcare sector.

“The opportunity here for Africa is not necessarily to replicate India’s model, but to consider what similar pools of specialised capital could achieve for African healthcare,” she said.

Chief Executive Officer of ABC Health, Dr. Mories Atoki, said the major challenge was not the absence of viable healthcare projects but the failure to match projects with investors willing to take the level of risk involved.

“There needs to be more early-stage investors. There’s no such thing as an unbankable project. There’s only such a thing as a risk-investor match. Some are early-stage, some are later-stage, and we need to match the right investors, or we need to invest in the early-stage ecosystem if we want to get to growth,” Atoki said.

Founder and Chairman of ARM, Deji Alli, who chaired the meeting, also stressed the importance of innovation in addressing challenges facing private investment in healthcare, saying, “Innovation can overcome regulation.”

Humphrey Oriakhi of PAC Capital cited the firm’s financing of a 250-bed multi-specialty tertiary hospital in Gateway, Abeokuta, built entirely with private capital.

HealthCap Africa said its pilot fund had also created more than 1,000 jobs across 10 African countries and reached more than two million patients.