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Incentivising the private Healthcare Sector in Africa

The World Bank has reported that between 2005 and 2012, Africa acquired 70,000 new hospital beds, 16,000 doctors and 60,000 nurses. Coupled with existing infrastructure, this additional resource now totals one million hospital beds, 500,000 doctors and 1,250,000 nurses, suggesting that the greatest demand will be in the healthcare services, particularly in-patient services.
These demands are expected to be met by for-profit organisations, non-government organisations and social enterprises and companies are already getting involved: social enterprises have been set up in Nairobi by the Phillips Africa Innovation Hub, and Novartis has initiated an access Public-Private Partnership (PPP) with Kenya, Ethiopia and Rwanda. The non-governmental organisation (NGO), United States Pharmacopeia Convention, is working with sub-Saharan countries to promote the quality of medicines made by strengthening quality assurances and quality control. The largest influx of investment so far has been focused on building and improving physical capacity in the form of hospitals and clinics and is an effective strategy to improve healthcare infrastructure. The IFC and its partners are currently the largest investors in private healthcare in Africa, and recently implemented a strategy to invest US$1 billion to assist economic development by encouraging growth of productive private enterprises in underdeveloped areas.
The IFC’s funding initiative has seen the development of 44 such investment projects to date, including the Hygeia Hospital Group project in Nigeria and the MP Shah Hospital expansion and redevelopment project in Nairobi, Kenya. As well as social enterprises and NGOs, some private sector investors have seen the potential and invested in the African Healthcare sector. In 2015, a Malaysian private hospital chain owned by the US investment firm Columbia Pacific Management announced its intention to set up in Nairobi, while the largest investment in East African retail pharmacy in 2016 was the acquisition of Goodlife Pharmacy by a UK private equity firm, Leapfrog. Read More