Economic Growth

This is the key to boosting economic growth in Africa

A nurse carries a Zipline vaccine delivery in Ghana, April 23, 2019. Zipline drones, supported by Gavi and the UPS Foundation, cut the time taken to deliver lifesaving medical supplies from hours to minutes. Gavi/2019/Tony Noel via REUTERS   ATTENTION EDITORS - THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. MANDATORY CREDIT

A nurse carries a Zipline vaccine delivery in Ghana. Image: REUTERS/Gavi/2019/Tony Noel

Carl Manlan
Chief Operating Officer, Ecobank Foundation
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African leaders continue to discuss their countries’ health-care systems in terms of funding gaps. In fact, those gaps will close only when Africa is viewed as an investment destination, not a foreign-aid recipient.

Africa’s health sector represents a massive investment opportunity, estimated by the United Nations Economic Commission for Africa to be worth $66 billion annually. Yet African leaders and donors continue to discuss Africa’s health-care systems in terms of funding gaps. In fact, those gaps will close only when Africa is viewed as an investment destination, not a foreign-aid recipient.

A strong health-care system is a prerequisite for economic development. But the development aid to Africa that is designated for health is not predictable enough to sustain the kinds of long-term investments that are needed.

Importing pharmaceuticals, for example, costs Africa an estimated $14 billion annually. Creating the conditions for local pharmaceutical manufacturing would not only slash that bill; it would also result in the creation of 16 million jobs. (This is yet another reason to support the African Continental Free Trade Area, AfCFTA.) Yet aid is often promised according to three-year timelines, with no guarantee that it will actually be delivered when needed to fund planned programs.

Of course, domestic public resources could be used for this purpose. But low economic growth and high debt-servicing costs have left many African governments with limited fiscal space. Yet, with a greater focus on improving tax collection, Africans stand a better chance of increasing their domestic revenues. And budgets are often subject to shifting political leadership and priorities, which can preclude consistent, long-term investment.

The result is that health-care spending in Africa is woefully inadequate. In 2015, the continent accounted for just 2% of the $9.7 trillion in global health-care spending, even though it represents 16% of the global population and 26% of the global disease burden.

Increasing health-care spending in Africa is not a matter of ramping up aid; the limits of external generosity are clearly already being reached. Rather, it is about getting private actors – especially Africans – to seize the relevant business opportunities.

The scale of those opportunities should not be underestimated. Rapid population growth, coupled with longer life expectancy, means that countries’ health-care needs will skyrocket in the coming years. By 2030, 14% of business opportunities in global health are expected to be in Africa, and the continent’s health and wellbeing markets will be worth $259 billion.

Meeting the health-care needs of a growing African population – and thereby ensuring that the continent has a healthy workforce to drive economic transformation – will require funding that is more predictable and sustainable, guided by reliable long-term strategies. Here, the African diaspora should take the lead.

As it stands, health-care spending funded by money from the African diaspora is more likely to be used to pay the medical bills of a sick relative (or, more broadly, on consumption) than to be invested in strengthening the system. Such investment would require pooling and channeling resources (via trusted intermediaries) toward projects that can meet the needs of entire communities at any given moment. And this presupposes a shift in focus from top-down solutions to the development of resilient systems that start at the community level.

For example, two million community health workers will be needed by 2020 to ensure that every African has access to quality care. This is not a new solution; community health workers were key to the health care received by my own parents in Côte d’Ivoire in the 1950s. But predictable funding is needed to build a system that can meet today’s health-care needs, while creating two million jobs. Other targeted investments include disease management, a market estimated to be worth $14 billion, and remote patient monitoring, estimated to be worth $15 billion.

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The more stable the investment environment is, the more willing private-sector actors will be to fund the kinds of large-scale interventions needed to unlock Africa’s productive potential. Establishing special economic zones, which have been successful in countries like Ethiopia, will further boost predictability and confidence, driving further progress.

As leaders gear up for the World Health Organization’s 72nd World Health Assembly in Geneva this month, it is worth highlighting the limits of donor-driven development in Africa. To lay the foundations for economic transformation – including by implementing AfCFTA – Africans at home and abroad must step up.

In the long term, the economist John Maynard Keynes reminded us, we are all dead. But long-term health investment is for the living. It means that those whose lives are just beginning will be able to build a more prosperous future and ensure that future generations, too, enjoy longer, healthier, more productive lives.

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