Stakeholders seek domestic capital for health amid foreign aid decline

Emergency Ward at Alex Ekwueme Teaching Hospital, Abakaliki

Stakeholders in Nigeria’s healthcare sector have called for increased mobilisation of domestic capital to finance healthcare infrastructure and businesses amid declining foreign aid.

It warned that African countries could no longer rely heavily on external assistance to meet their growing healthcare needs.

The warning was made at a 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 the sector.

The meeting, themed ‘Healthcare as an Asset Class,’ identified pension funds as one of the largest pools of domestic capital that could be channelled into healthcare, particularly as declining support from the United States Agency for International Development (USAID) and other foreign assistance programmes intensifies pressure on healthcare financing.

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

Participants noted that Africa carried 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.

The stakeholders also called on the Securities and Exchange Commission (SEC), National Pension Commission (PenCom), fund managers and other institutional investors to develop investment products that would enable pension funds to participate in healthcare financing while protecting contributors’ savings.

Speaking at the event, Founder and General Partner of HealthCap Africa, Dr Ola Brown, said India’s experience demonstrated what sustained private investment could achieve in healthcare.

Chief Executive Officer of ABC Health, Dr Mories Atoki, said the major challenge was not the absence of viable healthcare projects but the difficulty of matching projects with investors willing to assume the risks involved.