According to the report titled ‘India-Africa Healthcare: Prospects and Opportunities’, conservative estimates suggest that Africa’s health financing gap is at $66 billion per annum.
“Governments (African) are constrained by limited fiscal space for increased government spending (hence) investments by the private sector will be an important source to fill this gap,” it said.
While the WHO recommends at least 10 medical doctors per 10,000 people to ensure adequate coverage at the primary care level, Africa on average accounted for three medical doctors for every 10,000 people. According to the Human Development Report 2020 by the UN Development Programme, Africa has a density of 14 hospital beds per 10,000 population as compared to the world average of 27.
Though members of the African Union (AU) in 2001 had pledged to set a target of allocating at least 15 % of their annual budget to improve the healthcare sector, they haven’t been able to fulfil this goal.
“India has been the third-largest investor in Africa’s healthcare sector during the period 2010 to 2019 after UK and USA, accounting for a share of 19%. The cumulative global investment in Africa’s healthcare sector during this period was $1.1 billion with India accounting for $210 million,” the report said.
Most of the FDI has been channelled to set up general medical and surgical hospitals (82.4%), followed by outpatient care centres, medical and diagnostic laboratories (14.7%), and nursing and residential care facilities (1.6 %).
India has strong credentials to meet Africa’s health systems’ requirements given that it has “come a long way in the healthcare sector in terms of infrastructure, technology and accessibility, and affordability,” the report said.
India “has successfully controlled many communicable diseases and emerged as a destination for affordable and quality healthcare. India has long been engaging with several African nations to help alleviate several infectious diseases by making generic medicines and vaccines available at low costs,” it said.
“Besides Indian hospitals and healthcare service providers present in Africa, pharmaceutical manufacturing companies also have a strong presence,” it said pointing out that during the third India-Africa Forum Summit in 2015, India had announced a contribution of $10 million towards the India-Africa Health Fund.
According to David Sinate, chief general manager, research and analysis at the Exim Bank, “India could offer three types of financial models for developing healthcare infrastructure in Africa; by building hospitals, those provided under India Exim Bank’s LOC (Lines of Credit), Buyer’s Credit under the National Export Insurance Account (NEIA) and Commercial Buyer’s Credit. Indian companies with expertise in executing health infrastructure development projects such as building hospitals, health centres, and digitally connected medical facilities may leverage the opportunities in Africa.”
“The hospital could be developed in ‘design and build mode,’ which is done in the Engineering, Procurement and Construction (EPC) mode, or under EPC and Financing modes,” he said.
“Based on the requirement of the host country, Indian hospital operators could also be engaged for providing the technical expertise. This would give the healthcare project contractor a single point responsibility, which includes design, supply, installation, testing and commissioning of medical and paramedical equipment, and furniture. Additionally, a comprehensive maintenance contract for four to five years (even after handing over the facility) may be given. Indian companies could also invest through overseas investment or joint ventures to acquire or set up hospitals in Africa,” he said in emailed comments.
According to the Exim Bank report, “Africa spent around $6 billion in 2016 on medical tourism out of which $1 billion was accounted by Nigeria and $100 million by Kenya. On an average, more than 50,000 African patients visit India every year for treatment on a medical visa reflecting the demand for India’s affordable and quality healthcare.”
Sinate added that the Exim Bank estimated that “as an initial step, a $100 million fund could be set up for financing the construction of 500-bed capacity tertiary hospitals across Africa, to address the present healthcare infrastructure deficit.”
The Exim Bank had in the past extended lines of credit to several African countries for health projects that totalled 12 lines of credit worth $1.6 billion till 31 March 2021, Sinate said.
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