Financing Africa’s Healthcare

Alyssa GovindanNews

By Saurabh Sinha, Chief, Social Policy, United Nations Economic Commission for Africa

On average, a child born in Africa today can expect to live until beyond 2080. Whether this child will have a healthy life will depend not only which country she is born or decides to live in, or the types of decisions made by her, but also by the social, political, economic and environmental factors that shape our health and well-being.

Africa has made considerable progress in improving health outcomes in recent years, in spite of the challenges posed by poverty, epidemic diseases, food insecurity, environmental hazards, and conflict. Since 1990, life expectancy at birth, a key indicator of population health and economic development, increased from 54 to 63 years, and the number of women dying in childbirth and the number of children dying before the age of five nearly halved.

Despite this progress, Africa still accounts for almost half of all child deaths globally, an increase from 29 per cent two decades ago, and is the region with the highest proportion of child mortality, with 1 in 13 child deaths in the world before the age of five being in Africa. Most die as a result of easily preventable infectious diseases.

Many factors influence health outcomes. People experience good and poor health individually, but illness and death are also social phenomena shared by households, neighbourhoods, work environments, and the larger society.

Spending on healthcare has a strong positive effect on health outcomes. United Nations Economic Commission for Africa (ECA) analysis, using data from 48 countries over 2000-2015, shows that on average, doubling health expenditure per capita in this period is associated with a reduction in maternal mortality by more than 130 deaths (per 100,0000 live births), or by almost a quarter of Africa’s average maternal mortality rate. And life expectancy can increase by almost four years by doubling health expenditure per capita.

Even though total health spending per capita in Africa increased by 4.6 per cent per year in 1990-2014, the average total health spending in 2014 in Africa was US $332 per capita, about one quarter of the global average of US $1279. Scarce public funds and unpredictable donor aid often result in high out-of-pocket expenditure that push many people into poverty.

Countries need to re-prioritise public expenditure on health but face two big challenges of slow economic growth and high levels of debt, including significant private and unofficial debt. This provides a strong rationale for balancing Africa’s healthcare challenges with the opportunities afforded by the private sector.

The participation of private for-profit businesses in the delivery of public health is not new. However, what is new is the increasing presence of African private sector offering healthcare services.

ECA’s analysis reveals that private sector engagement in public-private partnerships (PPPs) in health in Africa is predominantly in the two areas of service delivery and health financing. Many areas such as laboratories and diagnostics, digital technologies, and human resources and education remain underserved and the private sector needs to leverage the African Continental Free Trade Area to invest in these sectors at a continental level.

In recent years, there have been attempts to harness private finance for attaining social policy goals, traditionally considered the responsibility of governments. Countries are considering the use of results-oriented innovative financing mechanisms such as Development Impact Bonds for injecting the much needed investments in the health sector. The Cataract Bond in Cameroon is one such example.

It is imperative that countries enhance funding for the health sector by identifying innovative sources of finance and accessing private financial investors. This will offer the best chance for the countries in Africa to provide the high quality, affordable and accessible healthcare their populations deserve.

[1] This piece is extracted from the forthcoming publication “Healthcare and Economic Growth in Africa” to be launched at the Africa Business: Health Forum in Addis Ababa on February 12, 2019.

 

Alyssa GovindanFinancing Africa’s Healthcare