According to a report entitled: ‘Healthcare and Economic Growth in Africa’ supported by Aliko Dangote Foundation, GDC Health and the Economic Commission for Africa, the continent has a health financing gap of at least USD 66 billion per year based on the threshold of 5 percent of GDP for government expenditure, while the actual need is USD 114 billion.
In response to this calls are being made for the private sector to come to the rescue and help improve healthcare in Africa.
“On average countries need to increase public spending on health by 2.5 times. With current trends and with numerous competing demands for public resources, governments are unlikely to be able to meet the health financing requirements,” the report said.
The report launch was attended by Prime Minster Abiy Ahmed (PhD), Ismail Omar Guelleh, President of Djibouti, Mokgweetsi Masisi, President of Botswana, Vera Songwe, the Executive Secretary of the Economic Commission for Africa, Aig Imoukuede, Co-chairman GBC Health, Michel Sidibe, Executive Director of UNAIDS, Halima Dangote, daughter of Aliko Dangote, and Didier Drogba. At the event Vera Songwe called for an improved Public Private Partnership (PPP) to finance healthcare in Africa.
The report calls for the private sector to leverage the African Continental Free Trade Area to invest in many under-invested sectors at the continental level.
“For instance Africa manufactures less than 2 percent of the medicines it consumes. Imports cater for over 70 percent of the pharmaceutical markets in Africa worth about USD 14.5 billion,” it added.
In view of the huge financing gap and the rising disease burden in Africa, it is clear that governments cannot meet all health costs on their own. The private sector has an important role to play in helping countries in Africa to achieve significant improvements in health outcomes, the report recommended.
Although there there is not data on specific nations, in Africa health related expenses in 2015 were 2 percent of the total share. “In 2015 approximately USD 9 trillion was spent globally on health, with Africa representing just two percent of the total expenditure, not withstanding it represents 16 percent of the global population and 26 percent of global diseases burden,” it said.
Rising government debt and illicit financial flows place an additional burden on healthcare.
“Debt servicing constrains governments’ availability of discretionary resources and limits the fiscal space,” the report reads.
There are 20 countries with an average burden more than 60 percent of GDP and in six countries it exceeds 100 percent.
“In 22 countries the average annual value of illicit financial flows far exceeds the health financing gap. This suggests that by taking measures to reduce these illicit flows, governments could fund healthcare and other social sectors,” it added.
According to the report, during 2003-2012, Africa is estimated to have lost about USD 300-USD 600 billion in capital flight resulting from illicit outflows. In fact, during 2003-2012 illicit flows from Ethiopia were USD 2.207 billion, which is 87 percent of government expenditure for health, or USD 2.5 billion.
Private sector health investment has its rewards, health business opportunities should be worth USD 259 billion by the year 2030, potentially creating 16 million jobs in Africa. This is because health businesses like the pharmaceutical industry, medical education and digital technology t are currently under invested, according to the report
Experts like Dr. Belay Begashaw, Executive Director of SDG Africa Center, a panelist at the forum, said that focus on research and technology is another crucial investment opportunity.
Tuesday’s forum also witnessed the launch of the African Business Coalition for Health in Africa, a coalition of business leaders and philanthropists committed to a healthier business space and the environment.