Linking investors with entrepreneurs to strengthen healthcare infrastructure
Johannesburg, South Africa. In May, the Gauteng MEC for Health, Dr. Nomathemba Mokgethi, referred to the issues the Gauteng public health system experiences as “pressures” rather than a “crisis,” and she blamed Covid-19 and the significant number of foreign nationals using the system. Again, in August, Dr. Phophi Ramathuba, the Limpopo Health MEC, sparked controversy on social media by urging the hospital to bill a Zimbabwean national for treatment. Whether these MECs are right or wrong, the fact remains that African healthcare systems are under pressure to deliver in the post-covid era. As noted by the IMF, in post-covid-19 the economic recovery for many countries depends on the policies that focus on strengthening healthcare infrastructure.
As we know, governments largely fund healthcare infrastructure in Africa. They mainly finance the upfront costs, but the ongoing maintenance and operational financing are very weak, making it challenging to meet the growing healthcare demands. The statistics from the Healthcare and Economic Growth in Africa report states that Africa’s financing gap is about $66 billion annually. In addition to that, $25-$30 billion of new investments are needed help meet the health care demands over the next decade, according to the IFC (International Finance Corporation).
With such gaps, health entrepreneurs play a crucial role in improving the healthcare infrastructure. But there is a need for more platforms that link investors with entrepreneurs. These platforms should connect people and provide the knowledge and expertise on how investors could help to improve healthcare infrastructure in the continent. Such platforms should also provide a well-grounded understanding of the market dynamics for investors to weigh potential investments.
In emerging markets like Kenya, Nigeria, and South Africa, we see entrepreneurs with innovative health projects but often lack investors ready to meet them. On the other hand, investors are looking for lucrative projects to improve healthcare infrastructure locally and beyond. With a lack of platforms that link investors with entrepreneurs, investors tend to look into established businesses or blueprint-stage ventures. In this regard, early-stage health entrepreneurs often struggle to find high-quality backup.
It is without a doubt that investors have honed their interest in the healthcare industry. While most of these investors look to provide catalytic support to global health, particularly for financial returns, some seek to make a social impact locally. In Nigeria and other countries, we see multinational institutions coming into community schemes to help them finance their health care for visible impact. There is a need to broaden investor resources to magnify health impact in terms of delivery and access. With the growing interest in innovative healthcare investments, African entrepreneurs need to pioneer new approaches sensitive to the local context for investors to meet them where they are.
With the lessons learnt during this pandemic, entrepreneurs should bring a methodology of building the long-term sustainability of healthcare systems around the continent. They should drill down to all problematic areas and make sure they focus on where they want to bring in sustainable healthcare. With so many healthcare pillars and facets, having the know-how to finance and operate healthcare infrastructure becomes crucial at this point. We need to roll our sleeves on the ground to ensure that our healthcare systems are operational while applying various models to ensure sustainability.