Investing in health is investing in prosperity

Good health is vital not only for personal wellbeing but also for any country’s economic development.  In this guest column,  Michel Sidibé, Executive Director, UNAIDS and Vera Songwe, Executive Secretary, United Nations Economic Commission for Africa explain why large volumes of investment in health  and innovative approaches offer promising outcomes. 

Home to 1.2bn people, Africa is the youngest of all the world’s continents, with a median age of just 19.7 years compared to the global median age of 30.4.

The continent has made considerable progress in improving health outcomes over the years. For instance, between 1990 to 2015, life expectancy at birth, a key indicator of population health and economic development, increased from 54 to 63 years, while the number of women dying in childbirth and the number of children dying before the age of five nearly halved. But there’s a long way to go.     

How do we ensure that the continent’s incredible source of human energy and capital drives future growth, well-being and prosperity, not only on the continent of Africa but globally? Investment in health is key.   

The right to health belongs to everyone. As the late Kofi Annan said, health is “not a blessing to be wished for” but rather “it is a human right to be fought for.” Our vision for this continent continues to be driven by the hope that the most vulnerable can live in dignity – and that must include access to good quality health care.          

And yet, for too many people, access to health care is simply not available. And, if it is, it is the straw that breaks the camel’s back – an unavoidable outlay that pushes families into destitution. Around 3.4bn people globally, who earn $5.50 a day or less, are just one medical bill away from sinking into poverty.

The right to health belongs to everyone. As the late Kofi Annan said, health is “not a blessing to be wished for” but rather “it is a human right to be fought for.”

Scarce public funds and unpredictable donor aid do not only impact on the quality of healthcare, but have also resulted in high out-of-pocket expenditure for health that has pushed many people into poverty.

The recent Healthcare and Economic Growth in Africa report launched at the Africa Business: Health Forum in Addis Ababa shows that in around half of the countries in Africa, 36% or more of total health expenditure is from out-of-pocket payments. A survey last year of patients at a government hospital in Uganda discovered that 53% of their households had to borrow money and 21% had to sell possessions to pay for treatment.

Investments are needed to ensure that the necessary infrastructure, personnel and other inputs for quality healthcare are available and affordable. Africa’s health financing gap of at least $66bn per annum renders remedial action urgent and crucial.

A survey last year of patients at a government hospital in Uganda discovered that 53% of their households had to borrow money and 21% had to sell possessions to pay for treatment.

In 2001, African Union countries pledged to set a target of allocating at least 15% of their annual budgets to improve the health sector. Only five countries have met the commitment – Botswana, Rwanda, Zambia, Madagascar and Togo.

About 22% of Africa’s total health spending continues to be financed by donor aid. A 20% cut in international funding would be catastrophic for the 44 countries that rely on international assistance for at least 75% of their national AIDS responses.

Diversifying funding streams

That’s why we must continue to champion sustainability transition plans that aim to diversify funding streams to strengthen the delivery and provision of health care services.

Governments need to strengthen their tax collection efforts, improve public financial management, identify innovative sources of finance such as insurances, and health bonds, and leverage the substantial market presence of the private sector.

For example, we must look at innovative ways to finance health care that include a much greater involvement for the private sector. The strategic engagement of the public and private sector towards bridging this gap and accelerating towards the 2030 Agenda is an imperative.

For example, it is estimated that the health and well-being sector in Africa will be worth about $259bn in 2030, with the potential to create over 16m jobs.   

A critical area is to boost the local production of pharmaceuticals on the continent. Africa represents 15% of the global population and has 25% of the global burden of disease but produces only 3% of the medicines used by its people. It is estimated that more than 80% of the antiretroviral medicines needed to treat HIV are imported from outside Africa.

An important institutional pillar in this regard, of relevance and impact, is the  African Continental Free Trade Area (AfCFTA) that provides economies of scale for continental production for continental needs.  [The  operational phase of the AfCFTA was  launched at the AU Summit in Niamey – Niger, earlier this month].

 It is estimated that the health and well-being sector in Africa will be worth about $259bn in 2030, with the potential to create over 16m jobs.   

Yet a recent analysis shows that costs for most drugs produced in Ethiopia and Nigeria tend to be between 5% to 15% lower than the price of imported products.

The pharmaceutical sector is projected to grow from $14bn in 2017 to $22bn by 2025, with Africa expected to be the fastest-growing market globally. A stronger capacity to produce medicines locally is therefore essential for a healthier, stronger and more prosperous Africa.

There is huge untapped potential in Africa’s health sector, and opportunities abound for the public and private sector.

Investing in a strong and resilient health care sector that focuses on people’s needs is an investment in the hopes and dreams of Africa’s youth and will ensure that we have a healthy and productive generation of young people, capable of meeting the many challenges that face humankind in the 21st century.

Let’s invest in a healthy Africa. It’s an investment in improved livelihoods, human security, productivity gains and prosperity for all of us.   NA