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Financing Future Infrastructure in African Healthcare

September 21, 2021
by Healthcare World

Vision, collaboration and government participation are key to success, as HW Editor Sarah Cartledge reports

The Festival began with a session on the funding of infrastructure projects in Africa. With an audience of 1,115 the session was chaired by Barry Francis, a former infrastructure lawyer and consultant.

The panel comprised Ralph Martin, Procurement Coordinator Contracta Construction UK , Richard Cantlay Global Health Portfolio Lead at Mott MacDonald, Chris Bonnett, Project Development and Infrastructure Leader EMEA at GE, Oluranti Doherty, Director Export Development African Export-Import Bank, Paul da Rita a healthcare consultant formerly of the IFC, and Dr Nicholas Crisp, Deputy Director General (National Health Insurance) Department of Health, South Africa.

The group acknowledged the many issues facing African healthcare infrastructure, and agreed that, somewhat ironically, the pandemic has actually helped highlight potential solutions. For African countries, there is a good opportunity to rethink the whole concept of delivery and to improve health systems by making sure that the focus is around healthy populations. The increasing use of digital methods will lead to identifying how much healthcare can be delivered outside hospitals to broaden the offering.

They discussed the need for a cohesive strategy in each country, underpinned by the concept of universal health coverage or UHC, that takes into account the population concentrations, the rural distances and the lack of basic facilities such as water in many areas. They even considered the idea of a pan-African vision but identified that the differing political and environmental climates might prove too difficult to resolve.

“It’s important that governments retain control of healthcare systems,” said Paul da Rita. “They clearly have a long term role in thinking strategically about healthcare and the infrastructure needs. But we also need to recognise that across the continent more than 50 per cent of all healthcare is already delivered in the private sector, so it will have a critical role to play as well. But the strategic direction and the leadership has to begin with the public sector.”

Delivering healthcare strategically

He went on to observe that if UHC is a strategic pillar of any government, then it can’t stand back and let the health system go in its own direction. “You have to provide it with leadership and ultimately with regulation and oversight. That is the role of government, not necessarily to deliver health care services,” he said.

He gave the example of Rwanda, which has created a new national healthcare structure in the wake of the civil war. The country has adopted technologies such as drones to deliver medicine to provide healthcare services to more remote populations, thereby avoiding the need for the population to travel to big urban centres or to provide much more built infrastructure in those urban centres.

Chris Bonnet, a Kenyan by birth, offered the example of a forward-thinking Kenya strategy. “We’re currently building a hub and spoke oncology model for the Kenyan oncology system. We’re supporting the Ministry of Health in all areas from software and clinical design through to the physical development of buildings and infrastructure. GE is a technology company, but our real job is to help public and private systems work.”

To change the health care infrastructure of South Africa requires a massive focus on primary care, according to Nicholas Crisp. This step would go a long way in removing some of the burden from the secondary and tertiary hospitals. “If you keep building the wrong things in the wrong place then you create even more problems,” he said. “We need to consider the facility running costs and then how to maintain them in the long term.

For Richard Cantlay there’s an opportunity to implement more standardisation in the design of hospitals that doesn’t require architects for each new facility. We need to design smaller, smarter, more decentralised and less grand,” felt Nicholas Crisp.

So, by designing the national healthcare system and then creating a strategic vision to deliver projects in manageable chunks, projects can come together in a joint and coordinated manner.

Financing the future

Paul da Rita stressed the magnitude of the challenge, given that health systems across Africa were already under stress before the pandemic. As many African governments move towards universal health coverage, the investment required to do so is well beyond the means of many of those countries.

It is also important to recognise that infrastructure investment across the economies of Africa is much more than just about healthcare. Current healthcare spending is only a small proportion, so clearly new financing models are required in both the public and private sector.

Public private partnerships (PPPs) are becoming an increasingly popular way of financing and procuring infrastructure across Africa as well as the rest of the world. But again, one solution is not going to be the whole answer. And in some cases, donor financing should be examined to see how it can be adapted to deliver long term infrastructure in innovative ways.

“The bottom line for us is always how are we going to pay for it?” said Nicholas Crisp. “Even public private partnerships have to be paid for. And if you’re moving towards a national health insurance like ours, where everything is ultimately paid for with tax, it means the taxpayer wants to see a return on investment. And that return on investment is not measured the same way when you’re talking about healthcare, because we see healthcare as a public good, not as a tradable commodity.”

New methods of financing

Oluranti Doherty of Afreximbank offered a unique perspective on financing. “We see a correlation between trade and health. In Africa we have the lowest life expectancy because of NCDs and non NCDs; we have lack of healthcare infrastructure and there is a huge gap in the system,” she said.

“Governments cannot meet their needs, so at Afreximbank we came up with the initiative to help finance infrastructure progammes. Under that we have debt financing instruments such as CONMED to help with construction of heathcare facilities and provide debt financing to both the public and private sector.

Through this we have supported facilities in Uganda and Liberia. We also helped in Ghana with financing of public sector hospitals. We also have seed funding for smaller businesses.”

Afreximbank came up with the decision to try to resolve the lack of healthcare infrastructure as part of its remit. Working with partners such as King’s College Hospital London it is setting up Medical Centres of Excellence across Africa, starting in Abuja Nigeria, in conjunction with national governments. Afreximbank are taking a significant portion of equity – 50 per cent – and attracting private investor financing to supplement it.

But aside from this ambitious project, she says it became clear that CONMED was not going to meet the additional need. The African Finance bank has instigated meetings for African banks to look at projects and then assess which bank will work with them. “There is no centralised pool but we work together on co-financing across the continent,” she says.

“We bring in government, stakeholders, financial institutions and regional economic communities. In 2019 we offered financing for developers to take them through their projects – we see this is a huge issue and if we solve this we can get more projects to be bankable.”

Paul da Rita highlighted political will which is critical to secure private sector investment in many African countries. “Related to that is political stability,” he said. “If we’re entering into long term financing arrangements and contracts, then that that stability is an absolute necessity. And what that means is that we can’t we can’t have projects driven by a single minister, rather it has to be policy across the government.”

Conclusion

For Ralph Martin, the issue has been convincing UK suppliers that Africa is a viable market. “It seems to be a fear of the unknown but most of the time they can work with advance payment for reassurance,” he said.

GE has more than 700 people on the ground in Africa to support their hospitals with training and education teams. Chris Bonnet felt that the key to success is a very effective ministry of health with a good vision and that’s prepared to listen and work with others to get it done. “If you just go with standard procurement, you’ll get what you’ve always purchased, which is some items, and that doesn’t build a health care plan and it doesn’t build infrastructure.

“The combination of an intelligent EPC contractor, great banking facilities, good policy, really helps develop health care. If you just go with standard procurement, you’ll get what you’ve always purchased, which is some items, and that doesn’t build a health care plan and it doesn’t build infrastructure.”

The feeling was that PPPs are a good way to achieve more infrastructure, with a focus on digital healthcare as a key part of delivery, especially now that interoperability has been achieved in many countries and they can work towards harnessing the data. The potential for leapfrogging was also raised, as Africa can use new technologies and create its own standards that truly reflect its needs.

“One of the key things from this session is the need for collaboration with the government, the public sector, the private sector, financial institutions – putting our heads together to be able to come up with solutions,” said Oluranti. “And the solutions may not be grandiose, rather small solutions that fit in with what individual country’s infrastructure needs are. We need to have efficiency at the core of what we are doing and to be able to work together to get things moving.”

The final thought went to Chris Bonnet. “Don’t be scared of working in Africa. It’s an amazing place with amazing potential!”

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