African Health CareThe Transform Health Fund announced at the U.S.-Africa Leaders Summit in December 2022 heralds a new age of private and public investment in African health care systems. A wide range of institutions has pledged either grant or private equity funding, including USAID, the U.S. International Development Finance Corporation (DFC), AfricInvest, private foundations, multinational corporations and the International Finance Corporation (IFC). The fund’s total commitments now amount to $50 million, capital which will go toward improving supply chains, health care delivery and the availability of digital tools to serve the unmet health care needs across sub-Saharan Africa.

The Financing Gap

Africa is home to 16% of the world’s population and bears 23% of the global disease burden, yet 1% of global health spending ends up in the continent, according to the Health Finance Coalition (HFC). Compared to their international counterparts, the Brookings Institute reports that Africans pay high out-of-pocket costs for health care — while also living in countries with some of the worst poverty rates in the world. Half of all Africans, according to DFC, currently lack access to modern medical facilities.

One challenge to building system resilience, exposed during the coronavirus pandemic, is the lack of African-made health care products: the continent imports more than 90% of pharmaceutical equipment and supplies to meet its health needs, according to Brookings. During the pandemic, Africa established local production firms and intra-governmental funds and partnerships, such as the African Medical Supplies Platform. Yet, there remain ample opportunities for improvements in disease prevention and treatment, pandemic preparedness and health commodity production throughout Africa. The IFC estimates that $25-$30 billion is necessary to ensure African health care systems can meet the continent’s rising demand.

Bridging Public and Private Financing

The Transform Health Fund is one example of an increasingly popular strategy of resilience-building in Africa’s health care system known as blended financing, or a capital stack approach. The primary feature of this model is public-private partnerships, where institutions, including government institutions like the DFC, nonprofit organizations and investment firms, leverage their resources to make an impact on a shared goal.

Virtues of the approach, according to agencies like Wilton Park, the International Monetary Fund (IMF) and IFC, lie in its distribution of risk among funders and its ability to achieve a balance between donor and commercial investments in the face of dramatic need. While donor institutions can help bolster emerging industries, health systems in capitalist, globalized economies require private sector buy-in to decrease dependency upon aid and strained state budgets.

Toward Universal Health Coverage

HFC and AfricInvest, key contributors to the Fund, state that the ultimate goal of the Transform Health Fund is to achieve Universal Health Coverage (UHC). The role of public-private partnerships in achieving this social impact is unique and complex. A Health and Human Rights Journal article warns of possible conflicts between the goals and priorities of private and public health care institutions, particularly as related to human rights-based conceptions of health care. Such conflicts are more likely to be avoided if collaborators can ensure African leadership of the initiative and both strong coordination, according to Wilton Park and effective regulation, according to Brookings, of Africa’s blossoming health care sector.

Given the widely documented link between health and poverty, stakeholders of the Fund hope that industries serving populations in need can also prove to be sustainable and profitable. With a target amount of $100 million, the Fund will primarily inject investments into eight countries in sub-Saharan Africa, including Kenya, Uganda, South Africa and Nigeria, according to the DFC report. However, with a diverse set of stakeholders and a strong focus on transformation, as its name suggests, the Transform Health Fund ushers a new future for the broader African health care landscape and, if successful, the well-being of all African people.

Hannah Carrigan
Photo: Wikipedia Commons