- Nigeria’s public spending on health care amounts to just 3.75% of its $495 billion GDP, according to the latest available figures from the World Bank.
- A recent report from real estate consultancy Knight Frank said Nigeria would require 386,000 additional beds and $82 billion of investment in health-care real estate assets to reach the global average.
- A report published Monday by New Markets Media & Intelligence highlighted a number of overseas companies and investment vehicles that have begun to invest in health-care infrastructure in Nigeria.
The coronavirus pandemic has sharpened the lens on a substantial health-care spending gap in Africa’s largest economy, and international investors are seeking to fill the void.
When it comes to health care, Nigeria is lagging its comparable African neighbors in terms of expenditure and access.
For example,Nigeria’s public spending on health care amounts to just 3.89% of its $495 billion GDP (gross domestic product), according to the latest available figures from the World Bank, compared to 8.25% in South Africa and 5.17% in Kenya.
According to a recent report from real estate consultancy Knight Frank, Nigeria would require 386,000 additional beds and $82 billion of investment in health-care real estate assets to reach the global average of 2.7 beds per thousand people.
Also, Nigeria’s 206 million population is expected to almost double by 2050, according to the U.N., which would see it become the third-most populous country in the world.
All of this — especially combined with the coronavirus pandemic — has sparked an interest in the sector from foreign investors.
A Knight Frank poll of 140 global investors in June found that 80% were considering investment in African health infrastructure in light of the coronavirus crisis. This interest centered primarily around hospital-related real estate and operating companies in collaboration with domestic experts.
As is the case across much of the African continent, Nigeria has managed to keep its coronavirus caseload relatively low given the size of its population, recording 90,080 cases and 1,311 deaths as of Monday morning, according to data compiled by Johns Hopkins University.
International interest growing
Even prior to the pandemic, African health-care assets had begun to generate interest more broadly. The International Finance Corporation, part of the World Bank, partnered with the Investment Fund for Health in Africa-II (IFHA-II) in November 2019 to form a $115 million acquisition vehicle for health-care service businesses in the east and south of the continent.
European development finance organizations such as Swedfund, the Swedish development finance institution, have backed IFHA, along with the likes of Pfizer and the Stichting Social Investor Foundation for Africa, whose backers include Aegon, Heineken, Shell and Unilever among others.
Since the onset of the pandemic, the Nigerian government has issued 100 billion naira ($254.6 million) in state credit facilities for health care, from pharmaceutical companies and product manufacturers to service providers, which has seemingly spurred greater interest from private investors. The Bank of Industry, a Nigerian development finance institution, is supplying a further 50 billion naira.
“There is a very compelling opportunity for the development of world-class healthcare facilities across Africa, but especially Nigeria,” said Hafeez Giwa, managing partner at HC Capital Properties, which has started to invest in health-care assets in Nigeria.