By: ‘Kayode Ajayi-Smith, GBCHealth Communications

Africa is poised to reap a windfall from its fast-paced urbanization; technological acceleration, with investments totaling $129 million in 2016; abundance of natural resources; and rising workforce — estimated to top 1.1 billion workers by 2034 according to McKinsey Global Institute.

Despite a series of economic crises caused by the dwindling price of crude oil and commodity price crashes, Africa’s economy continued to grow at an average rate of 3.3% (GDP) in 2015. To effectively reap expected gains, Africa will need to ensure macroeconomic stability, economic diversification, and political and social stability.

Small and Medium-scale Enterprises (SMEs) create 80% of the Africa’s employment, contributing on average 33% to GDP, solidifying a new middle class and fueling demand for new goods and services. SMEs are therefore vital to the continent’s economic, political and social stability. As a result, convincing SMEs of the value of investing in employee health through national insurance schemes may be the most direct pathway towards achieving universal health coverage. Investments in health also have the potential to enable SMEs to capitalize on demographic changes to return powerful dividends to developing nations.

Health as a Comparative Advantage

Increasingly, SMEs in Africa will need to attract and retain talent to build adaptable and efficient teams and keep their businesses on the path toward growth. As larger companies know, health benefits are an essential part of a package of rewards, beyond compensation, that can be utilized to recruit top talent. Yet, these benefits accrue not only to the employee, but to the business itself. A team’s health status plays a significant role in a company’s productivity. Small businesses stand to suffer substantial losses as a result of poor employee health. Short-term interruptions can lead to loss of important clients and contracts, while even small incidences of workplace sickness can double the level of company-wide absence.

The benefits are clear, small businesses stand to gain most if proper systems are in place. Improvements in productivity, reductions in absenteeism, improvements in morale and better staff engagement are significant benefits for growing businesses. As the future engines of growth across the continent, small- and medium-sized businesses that pay attention to keeping employees as healthy as possible will have a distinct advantage over their competitors. These gains can be realized through dedicated workplace programs to address specific health issues such as HIV/AIDS or diabetes in high-burden areas; or through linking employees to private insurance markets and national health insurance schemes.

SMEs Drive Community Health Benefits

Further, the benefits of workplace health investments have been felt even beyond the business itself. Workplace programs have, in many ways, become the frontlines in the fight against diseases like malaria. The private sector has played a leading role in developing interventions, including partnerships, innovative products and new service delivery models, that continue to impact employees and their communities.

Through supporting community health programs, SMEs have an opportunity to create closer relationships with the communities they serve and, by extension, their consumers. Engraving a company’s brand on the hearts of communities by doing good, increases consumer social attraction and provides opportunities for increased sales, new partnerships and tax deductions.

Tackling the Challenge

Despite these benefits, it can often be difficult to convince SMEs to invest in health care, especially in countries where health insurance plans are relatively new phenomena. Interestingly, healthcare costs have been exaggerated, essentially because the benefits of insurance have not been considered as part of a larger business strategy or enshrined in cultural values. Individual employees do not see the need to see a doctor until the situation gets critical. Yet, the knowledge of healthy living imparted at the office can drive prevention, spur proactive health-seeking behavior, reduce costs to the system and deliver dividends at an older age.

Health Insurance Opportunities for SMEs

Businesses need to better understand how health insurance markets function to evaluate the costs and recognize the benefits. Health insurance products survive on the tenets of pooling cost to ensure that the risk of paying for healthcare is not borne singularly by an individual, but by all contributing members. Healthcare plans reduce risk and drive down costs as a result of these economies of scale. As the continent’s workforce population continues to rise, health insurance firms will need to enroll more members in healthcare schemes to further drive down the cost.

Health insurance firms are starting to demystify the cost of delivering basic health services. In Nigeria, the cost of a basic SME healthcare family plan, which includes consultation, medication, and accommodation for a year ranges from NGN 100,000 to NGN 200,000 (USD 314 – USD 630).

The convergence of insurance markets or national insurance schemes and SMEs will be required if we are to move toward Universal Health Coverage. To succeed, health insurance firms will need to explore all forms of communication to effectively impart knowledge and demonstrate the benefits of healthcare plans if SMEs and their employees are to fully embrace the notion. SMEs must also begin to maximize the dividends that healthcare brings to the future growth of their businesses and their communities.

GBCHealth will be working with SMEs in Africa to help managers recognize the tangible benefits of investing in health and to support partnerships which accelerate progress on universal health coverage.