Pension funds urged to finance Nigeria’s healthcare

As funding for healthcare from USAID and other foreign assistance programmes has declined, HealthCap Africa has called for a stronger domestic capital ecosystem to help finance Africa’s critical healthcare needs.

According to a release from the organisation, the call was made at its private markets & healthcare roundtable with the theme “Healthcare as an Asset Class”, held in Lagos recently.

Speaking at the event, HealthCap Africa founder and General Partner Dr Ola Brown highlighted Quadria Capital’s healthcare-focused investment platform in India and its scale as an example of what sustained private investment can build.

“Quadria Capital is one of the largest VC funds in Asia focused on healthcare. They have raised over $1bn and have an AUM of over $4bn. As you know, many Nigerians go to India for healthcare. Now imagine how much private capital has gone into building their healthcare sector,” she noted.

She explained that the investment coincided with a decline in maternal mortality from 384 to 80.5 per 100,000 live births between 2000 and 2023.

 “The opportunity here for Africa is not necessarily to replicate India’s model, but to consider what similar pools of specialised capital could achieve for African healthcare,” she added.

Humphrey Oriakhi of PAC Capital highlighted the firm’s financing of a 250-bed multi-specialty tertiary hospital in Gateway, Abeokuta, built entirely with private capital. HealthCap Africa claimed its pilot fund had created more than 1,000 jobs in 10 African countries, reaching over two million patients.

Also, the CEO of ABC Health, Dr Mories Atoki, said, “There needs to be more early-stage investors. There’s no such thing as an unbankable project. There’s only such a thing as a risk-investor match. Some are early-stage, some are later-stage, and we need to match the right investors, or we need to invest in the early-stage ecosystem if we want to get to growth”

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Similarly, ARM founder and Chairman,  Deji Alli, highlighted the role of innovation in addressing regulatory and market challenges, noting that “Innovation can overcome regulation”.

Pension fund representatives at the meeting came from institutions collectively managing more than US$5bn in assets under management.

The high-level convening brought together regulators, pension fund managers, development finance institutions, healthcare investors and operators to examine how African countries, particularly Nigeria, can mobilise more private and institutional capital for healthcare.

Participants at the event identified pension funds as one of the most significant pools of capital that could help scale healthcare investment.

According to the World Health Organisation and the World Bank, Africa carries  22 per cent of the world’s disease burden but receives just one per cent of global health spending, with an estimated US$1.1tn annual health financing gap.

Participants emphasised the need for Africa to move beyond reliance on external healthcare funding. Instead, to build a more diversified and sustainable healthcare financing model in which government, philanthropy, development finance and private capital play complementary roles.

They highlighted continued collaboration among managers, institutional investors, and regulators, along with transparency, as well as the development of well-governed and appropriately structured investment products as ways to address the healthcare funding challenge on the continent.