The healthcare sector in Africa is heavily underserved, as Sub-Saharan Africa holds 11 per cent of world population, but 24 per cent of the global disease burden, and only spends one per cent of total health costs. A new African company, Hospital Holdings Investment, has been set up to increase access to hospitals and healthcare clinics in eastern and southern Africa. Going forward, the strategy is to set up new hospitals and health clinics as well as to acquire existing facilities, which can be modernized and expanded.
Thereby the investment contributes to UN Sustainable Development Goal 3, which aims at achieving universal health coverage, including access to quality essential health-care services at an affordable price. This especially applies to developing countries, in which, according to SDG 3.c, a substantial increase in health financing and recruitment, development, training and retention of the health workforce must be achieved.
The company’s first investment is in AAR Health Care an existing company serving more than 700,000 patients annually in Kenya, Uganda and Tanzania.
Moreover, AAR Health care is reaching out to young people through CSR activities related to health issues like deworming and promoting a healthy environment and lifestyle.
– In Africa, healthcare is in short supply, and consequently there is a great need to increase the access and quality of health-related services in Africa. By investing in Hospitals Holdings Investment, we contribute to solving one of the big challenges for creating better living conditions on the continent, said Torben Huss, CEO of IFU, which is fund manager of the Danish SDG Investment Fund.
Insurance schemes are growing
In general, there is a growing demand for healthcare services, which is primarily driven by an increasing middleclass, growth in insurance schemes and improved government expenditure. In Kenya, the National Health Insurance Fund has been reformed, which has resulted in the ability for the insurance scheme to pay reasonable prices for a wide range of procedures in public and private hospitals. Today, the compulsory health insurance in Kenya has more than 7.6 million members and in total covers over 25 million people, which is about half the population.
In the other target countries Uganda, Tanzania and Zambia, national health insurance schmes are also being set up and improved to cover more people across different income groups. Hospital Holdings Investment will align its business with the different insurance schemes and provide an important supplement to public facilities.
In addition to improving the healthcare sector, it is expected that Hospital Holdings Investment will create 1,300 jobs and provide professional staff training.
DFIs are providing finance
Several Development Finance Institutions are providing the main share of the total investment of DKK 750m. These are IFC, Finnfund, Swedfund, Proparco and the Danish SDG Investment Fund, with the latter investing DKK 60m in share capital.