The challenges of investing in healthcare in Sub-Saharan Africa


“One important thing is to never assume that any country or sector in Africa works the same as South Africa. They all have different dynamics and are at different stages of a life cycle,” Fredre Meiring, debt and capital advisory partner in corporate finance at professional services firm , Deloitte, told CNBC Africa on Wednesday.

According to reports, around 60 per cent of health care in Africa comes from private sources and 50 per cent of total health expenditure goes to private providers.

Consequently, the vast majority of people in the region rely on private healthcare therefore the need for private sector investment in the health space is critical and has already proven to be a significant player in many countries that have a failed public healthcare system.


Meiring explained that while there is a great appetite from private enterprises to invest in healthcare in Sub-Saharan Africa, it has proven to be quite complex as many factors come into play such as  the dynamics of each country’s healthcare system as well as the feasibility of the opportunity.

“When private sector groups invest in healthcare, they need to look after their shareholder’s funds. So it is an opportunity but to an extent as they also need to look at where they can get the least risk for the greatest return,” he said.

“You also need people on the ground in the country to really understand it and live the life of those people to find out all the nitty gritty issues before even approaching the matter of investing in health care in that country.”

While public healthcare is driven by government and their commitment to provide basic services to its citizens, the governments tend to take a long time to set up healthcare facilities and also need to explore various models of funding for these projects.

“Ultimately, governments realise that they need to provide these services to its citizens. Not only from a moral point of view, but also to extend longevity and create a better economy,” Meiring pointed out.

However, public resources have proven to be limited in Sub-Saharan Africa and the opportunity to leverage off the private sector to improve access to facilities, increase financing as well as quality of healthcare goods and service remains critical.

On the other hand, Meiring stated that private healthcare investment for the region is on the radar for investors.

Deloitte currently offers an advisory service to clients looking to expand on the continent by assisting them with early stage development of the projects such as feasibility, quantifying risks and return as well as general issues such as employing medical staff and if the country offers a medical aid system.

“We then get all this information together and get all the parties involved so we can find a way to add value to this project,” he explained.

Currently, he added, healthcare systems in the region are in the process of being developed, both by public and private sector and many countries such as Botswana, Kenya, Nigeria and Tanzania have shown signs of an advancing healthcare system.