IFC helps Nigeria set up a PPP for a new 105-bed hospital
In spite of Nigeria’s fast growing economy and vast oil wealth--the country is the 6th largest producer of petroleum in the world, 92 percent of the population lives on less than two dollars a day. Years of military dictatorship, corruption, political instability, and poor governance have meant insufficient investments in the country’s infrastructure and basic services. This has impacted health, health care and general living conditions which are poor, especially for children and women. Life expectancy is low at 44 years and HIV/AIDS remains a major issue. A weakened public health care system with low coverage of key interventions has resulted in the persistence of high disease burden. The country has also been undergoing explosive population growth and has one of the highest growth and fertility rates in the world.
In order for Nigeria to make appreciable progress on poverty reduction and quality of life, an increase in the capacity to deliver public services and better utilization of resources is essential. The recent signing of a public-private partnership agreement between the government and a consortium comprising Utopian Healthcare Consulting, SIMED (the Netherlands), Cure Healthcare Management Services (Hong Kong), CCP (Nigeria), Healthfore (India), and ITB (Nigeria), for the development and operations of a new 105 bed referral hospital in Calabar, will provide a number of social and economic benefits to the state and its population. The hospital is expected to provide high quality advanced secondary clinical and diagnostic services to the 500,000 citizens of the greater Calabar area as well as all citizens of Cross River State, and will play a role in the government’s overall growth strategy for the state by creating jobs.
The project will span 10 years, including 2 years for construction and 8 years for operation, and is anticipated to be operational in 2015. The construction and equipment expenditures of the project will be financed by the government. The consortium will bear some project development costs, deliver a turnkey hospital, and will then be responsible for running the hospital operations under the terms defined in the PPP agreement. Quarterly payments from the government will contribute to make the services affordable for the population.
IFC was the lead transaction advisor to the government of Cross River State in this transaction. The project received support from the Netherlands Ministry of Foreign Affairs through the Netherlands-IFC Partnership Program (NIPP), the South Africa’s technical assistance trust fund, and HANSHEP, a group of development agencies and countries, seeking to improve the performance of the non-state sector in delivering better healthcare to the poor.