IFC supports growing role for private sector in African health care

According to a report from the International Finance Corporation (IFC), spending on health in Sub-Saharan Africa is likely to double over the next ten years. Investments of $25 billion to $30 billion will be needed, says The Business of Health in Africa, with about 60 per cent of this provided by the private sector, which already plays a significant role in delivering and financing health care in Africa. However, there are impediments to developing a productive private health sector, which the IFC aims to address.

These impediments include limited access to capital, burdensome regulations, shortages of skilled workers, and a lack of risk-pooling mechanisms that can mobilize revenue for providers. To counter these, IFC will work with local businesspeople, financial intermediaries, policymakers, donors, and other stakeholders in the international community on a strategy that will involve mobilizing up to $1 billion in investment and advisory services over the next five years. The elements of this strategy include:

  • creating an equity investment vehicle ($100 million to start and up to $350 million over five years) to provide socially responsible private health care organizations with better access to equity and expertise;
  • partnership with local financial institutions to improve access to long-term debt for health care organizations ($400 million to $500 million over five years);
  • providing advisory services to build capacity in local financial intermediaries and the health care organizations they lend to;
  • expanding the education of health care workers;
  • encouraging the development of risk-pooling.

Since the launch of the report in December 2007, IFC and the World Bank have embarked on a major campaign to build support for the strategy, mainly in Europe, Africa and the US.

For more information
Contact Ludwina Joseph at Ljoseph@ifc.org or visit http://www.ifc.org

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