Washington, D.C., September 8, 2006— Sub-Saharan Africa is not on track to meet the three Millennium Development Goals related to health—child mortality, maternal health, and disease. IFC and the Bill and Melinda Gates Foundation are teaming up to help.
Almost half of the world’s deaths of children under age five still occur in Africa. The region has the world’s highest maternal mortality, while HIV/AIDS, malaria, and tuberculosis continue to undermine the hope and vitality of its people. Local governments have made some strides—in some cases, with aid, advice, and development assistance—but progress remains slow. Increasingly, there is recognition that the private sector must play a key role to improve health and reach the MDGs. To tackle this challenge, IFC, the world’s leading private sector development organization, and the Gates Foundation, the foremost health-focused philanthropic organization, are joining forces to develop a new, highly targeted, and commercially-based approach to private health care in Africa.
The two institutions will spend $2.6 million to conduct research that will help determine the kinds of business models that provide the best service to people at different income levels. This effort will also determine the kinds of financial products that IFC should be offering to support private sector involvement in these services.
The research will be used to create an environment for change by bringing together leading experts, including financiers, insurers, donors, policymakers, regulators, and operators. The effort will explore ways that financing and provision of private health services in Africa can be improved, especially to increase access for the poor.
World Bank Group President Paul Wolfowitz said, “When roughly 60 percent of health expenditures in Sub-Saharan Africa come from private sources, and when poor people are as likely to go to the private sector seeking health services as to the public sector, it is important to look at ways in which the private health sector in Africa could be made more effective. As two of the most innovative institutions in the development field, the Gates Foundation and IFC are ideal partners in this effort."
The Private Sector’s Role
Both IFC and the Gates Foundation recognize that the private sector is a key element in African health care, given its significant size and role in the market. The current size of the region’s private health market, excluding South Africa, is $18.6 billion. The region’s total health market, including public expenditure, is $31.3 billion. (Figures come from World Bank reports and are based on GDP per capita, purchasing power parity.)
Contrary to popular opinion, the region’s poorest people already seek out private health services more often than public health services. (See box below). Hence the private sector is already central to health care delivery in the region, and the international community must make it a larger part of its work to find solutions.
IFC’s Executive Vice President, Lars Thunell, noted, “In Africa, the private sector plays an increasingly important role in delivering health services. It is vital that this role be recognized and allowed to flourish. Through this partnership with the Gates Foundation, IFC expects to raise understanding of the value of the private sector in the health care market and help put in place measures that will permit it to grow.”
The project is expected to:
IFC’s Director for Health and Education, Guy Ellena, added, “Governments have traditionally delivered and financed most health care, but in the emerging markets, public resources are not sufficient. In Sub-Saharan Africa, where needs are huge and public financing is scarce, private health care has become a dominant force. IFC is committed to supporting private health care in the region, and joining forces with the Gates Foundation will help us understand what works, and under what conditions.”
As a result of this research with the Gates Foundation, IFC hopes to attract investors from Sub-Saharan Africa, from industrial countries looking to expand their services and products into the emerging markets, and from such countries as Brazil, China, and India that have experience working in emerging markets and want to branch out into Sub-Saharan Africa.
Africa’s Poorest People Often Rely on Private Health Care
|A recent paper by the World Bank surveyed the poorest fifth of Sub-Saharan Africa’s population to understand better what these parents did when their children were ill. The survey generated some surprising outcomes. On average, more parents sought health services for their children from the private sector than from the public sector.
Source: Trends and Opportunities in Public-Private Partnerships to Improve Health Service Delivery in Africa. Washington D.C.: World Bank, 2005
The project’s Steering Committee met for the first time on September 8, 2006, at IFC headquarters in Washington to discuss the objectives and structure of the project and formulate potential outcomes. The five-member committee includes representatives of government and business as well as IFC and the Gates Foundation:
Lars Thunell, IFC’s Executive Vice President, who will chair
Guy Ellena, Director of IFC’s Health and Education Department
Dr. Tadataka Yamada, President, Global Health Program, Gates Foundation
Prof. Eyitayo Lambo, Minister of Health, Nigeria
Dr. Jack Shevel, Founder and Former CEO, Netcare, South Africa
Video Clips of Interviews by Reuters
Prof. E. Lambo is Minister of Health, Nigeria
To find more information on IFC’s work in health, visit Health and Education Department website.
Health and Education Department, IFC