Africa’s Healthcare Challenge
Sub-Saharan Africa has an urgent need to expand its healthcare infrastructure.
The scale of Africa’s healthcare challenge is made clear by a quick reading of the World Health Organization’s 2023 statistical report of world health.
Africa has the highest maternal mortality rate. It has the highest under-five mortality rate at almost twice the global average and nine times higher than Europe. It has the highest mortality rate for deaths related to unsafe water and sanitation. The region also has the lowest life expectancy, at under 65 years.
According to the WHO, those born in Africa in 2048 can expect to live 15 years less on average than their counterparts in the Western Pacific.
It is not all bad news. The HIV incidence rate in Africa fell by 58% between 2010 and 2021. And taking a very long view, life expectancy at birth has risen dramatically from 37.6 years in 1950.
But accessing medical help remains a huge challenge for most people, especially those living in rural areas. The number of doctors available per 10,000 people in Africa is just 2.9, compared with 36.6 in Europe. For nurses and midwives, the figure is 12.9, compared with 83.4 in Europe. The number of dentists per 10,000 population is 0.3 in Africa, compared with 6.2 in Europe.
This is without even considering the question of affordability of access, and the need to travel long distances to reach the nearest hospital or health centre.
The healthcare sector in Africa has suffered from decades of underinvestment and in many countries, infrastructure has been repeatedly ravaged by war, and all the while the continent’s population has continued to grow.
Healthcare spending as a percentage of total government expenditure in 2020 was 7.3% for Africa as a whole, while in Europe it was 12.6%.
International consultants such as Deloitte, Knight Frank and KMPG suggest a range of solutions to address Africa’s healthcare problems including the use of telemedicine and the roll-out of private health insurance to cover the working population. While these must be part of the solution, investment in brick-and-mortar public hospitals remains urgent and unavoidable.
Building healthcare infrastructure
The Ebola and Coronavirus outbreaks in Africa shone a spotlight on the moral obligation that authorities have to invest in healthcare infrastructure and this has helped to speed up decision-making and unlock funding for hospital projects across the continent.
Ghana’s Agenda 111 project stands out as a flagship healthcare project in Sub-Saharan Africa.
Agenda 111 was launched in 2020 at the start of the pandemic to redress six decades of underinvestment in the country’s healthcare system. It aims to ensure that every region and district has a hospital in order to increase access to healthcare and achieve universal coverage by 2030.
The US$1.76 billion project involves the construction of 101 district hospitals and seven regional hospitals, two psychiatric hospitals and the rehabilitation of the Accra Psychiatric Hospital. For each facility, US$13 million has been budgeted for construction and US$4 million for medical equipment.
Each hospital campus will feature an accident & emergency department, paediatric and maternity wards, an isolation ward and four surgery theatres. There will also be accommodation blocks for families and doctors, and diagnostic laboratories.
According to the Ministry of Information, 88 contracts out of the 111 projects planned had been awarded as of mid-2023 and construction was about 50% complete on 54 of the hospitals. These are all expected to be commissioned by the end of the year.
The execution has not been without its challenges. Some of the hospitals projects have encountered delays due to problems in securing land, and at least three contractors have had their contracts terminated after missing key performance indicators.
But the Agenda 111 programme is set to transform healthcare delivery in Ghana, creating 33,900 jobs for construction workers and 34,300 health workers in the process.
Funding hospital projects
While Ghana is funding this particular programme itself through budget allocations and the Ghana Investment Infrastructure Fund, many hospital projects in Sub-Saharan Africa are dependent on international development institutions providing long-dated, low-cost financing. For example, UK Export Finance is supporting a project to build and equip six greenfield hospitals in Côte d’Ivoire.
In August 2021, UK Export Finance provided a €241 million (US$258 million) loan facility involving a combination of buyer credit and direct government lending to enable NMS Infrastructure (NMSI) to design, construct and equip the six hospitals through an export contract with the Ivorian Ministry of Health and Public Hygiene.
The project entails the turnkey delivery of two regional hospitals with a 150-bed capacity at Bouaké and Boundiali, two 90-bed regional hospitals at Katiola and Minignan, and two 80-bed general hospitals at Kouto and Ouangolodougou.
The specifications for each hospital are similar, with a central hospital block housing the main functions such as reception, emergency department, theatres, pharmacy, diagnostics and outpatients department, and separate buildings for the wards and the maternity department, and for support functions such as laundry, technical services, catering, mortuary, and a staff residential area.
The hospitals are due to be completed by 2024. Following a seven-year maintenance contract, the full operation of the hospitals will be undertaken by the health ministry. More than 20 local subcontractors are involved in the building programme. The main construction work on 180-bed regional Bouaké hospital was completed in June. The total cost of the project to build the six hospitals is estimated at €326 million.
Other major hospital projects underway in Côte d’Ivoire include the 187-bed, US$52 million Odienné Regional Hospital Centre and the 60-bed, US$23 million Gbéléban General Hospital. Construction got underway in August 2022 and is due to take 24 months to complete.
Thanks to its ability to secure finance, the UK's NMSI has emerged as a key contractor in the hospital sector in Sub-Saharan Africa. Including the Côte d’Ivoire deal, it has won US$943 million of hospital contracts in recent years.
In Zimbabwe, it is building five 60-bed district hospitals and 30 22-bed health centres under a US$210 million contract with the Ministry of Health & Child Care. (As of August, two healthcare centres had been completed.)
In Zambia, it is working on five 80-bed district hospitals as well as building 115 mini hospitals with 21-beds each under a US$300 million contract. (As of January, 101 mini hospitals had been completed and the first district hospital - at Mfuwe - was inaugurated in June.)
The firm is also involved in Ghana’s Agenda 111 programme, responsible for the construction of six 120-bed district hospitals and seven multi-storey apartment blocks for staff accommodation at the existing Takoradi-European Hospital, under a US$175 million contract with the Ministry of Health.
In April 2022, NMSI signed an agreement with the US’ GE Healthcare to jointly develop hospital projects in Africa, with the former leading on the construction work including design, construction, project management, financing and installation; and GE Healthcare leading where the majority of the project involves equipment supply.
The Saudi Fund for Development (SFD) has also shown a strong willingness to provide soft loans to healthcare projects in Sub-Saharan Africa.
In early September, it signed a US$30 million loan agreement to support the construction and equipping of the new Uganda Heart Institute in Naguru, Kampala district.
The total cost of building the heart centre is estimated at US$73 million. The Arab Bank for Economic Development in Africa and the OPEC Fund are also providing loans of US$20 million each, while the government of Uganda will contribute US$3 million to the project.
The Uganda Heart Institute will feature two fully equipped emergency admittance and care facilities, intensive care and emergency units with catheterisation procedure rooms, x-rays, and CT scans, two operating theatres for a wide range of cardiovascular surgical interventions, and five clinical and research laboratories. It will have 222 beds of which 20 will be in the critical care unit.
The feasibility study for the project was completed in 2018. The total cost of the civil works has been estimated at US$46 million. The project scope entails the construction of three blocks: a clinical block; a research and training block; and a staff and maintenance block. The construction contract has not yet been tendered.
The Uganda deal was signed a year after the SFD had agreed a US$12 million loan to finance the expansion of the Mbalmayo regional hospital in Cameroon. In 2022, the SFD also approved funds to support the rehabilitation of King Khalid Hospital in Bujumbura, Burundi, and the construction and equipping of the King Salman Referral Hospital in Sierra Leone.
As of the end of 2022, the SDF had loaned a total of US$770 million to 34 hospital projects in Africa since beginning its development activities in 1974. It is understood that the interest rate on the Ugandan loan is 2%, with a maturity period of 25 years including a five-year grace period.
The Uganda Heart Institute project aims to decrease the number of Ugandans leaving the country to receive cardiovascular treatment and to raise public awareness of heart disease.
Whereas healthcare investment previously tended to focus on combating infectious diseases such as HIV and malaria, changing lifestyles and rapid urbanisation mean that non-communicable diseases are now on the rise in Africa. A key trend for the future will be the construction of specialist centres for diabetes, heart disease and cancer care.
Kenya’s 2023/4 budget allocates Ksh1.9 billion (US$130 million) for the construction of a cancer centre at Kisii hospital and Ksh155 million for the establishment of regional cancer centres. The budget also earmarks Ksh2.4 billion for the construction of Kenya National Hospital Burns and Paediatrics Centre and Ksh1.1 billion for the renovation of Kenyatta National Hospital.
For more than a decade now, the Kenyan government has been keen to engage the private sector in the delivery of healthcare infrastructure and clinical services in order to achieve its goal of universal healthcare coverage while limiting the burden on the public purse.
In 2015, the government signed a seven-year Managed Equipment Services Partnership (MES) with several Original Equipment Manufacturers for the supply of teleradiology equipment for 98 hospitals. (An MES is a form of public-private partnership (PPP) that uses performance-based payment plans to defer upfront capital outlays.) The project encountered several challenges, however. For example, at some hospitals, equipment could not be installed due to inadequate power supply, while at others the equipment was underused due to a lack of qualified personnel.
A feasibility study for a new 300-bed hospital, known as the Kenyatta National Hospital PPP, was commissioned from Ernst & Young in 2018. The plan entails building a standalone private facility adjacent to the existing Kenyatta National Hospital, which is currently undergoing renovation. In 2019, firms were invited to prequalify for the PPP contract and the following year, consultants were invited to express interest in providing transaction advisory services for the project through to financial close. But progress appears to have stalled since then.
ConstructAfrica’s attempts to confirm the status of the project with Kenya’s PPP unit went unanswered. However, the project was included in a PPP pipeline report compiled by The National Treasury & Planning department in March 2022, which gave its status as in the project preparation stage.
Two other hospital-related projects were included in the PPP pipeline report: the 50-bed Meru Cancer Care Centre and Satellite Clinics project and the Moi Teaching and Referral Hospital’s College of Health Sciences expansion project. It said the plan was to award 20-year design, build, finance and maintain contracts for their execution.
The Ministry of Health in its 2020 strategy report Private Sector Collaboration in the Kenya Healthcare Sector notes that while steps have been taken to create the right policy and regulatory environment to enable PPPs in the health sector, the institutional capacity to take advantage of the opportunities has yet to catch up.
In particular, the report highlights a lack of expertise at county-level in Kenya to initiate and implement PPPs. It also states that concerns surrounding corruption and payment delays make private sector players reluctant to participate in long-term PPP arrangements.
The report advocates for an ecosystem approach to PPPs with the aim of achieving a system-wide transformation of the healthcare sector in Kenya, rather than one-off transactional interactions resulting from an urgent need to provide a service in the absence of funding.
“A collaboration strategy must therefore move beyond the infrastructure-type of arrangements that are strongly focused on inputs and instead look at how private sector strengths can be channelled towards strengthening operational aspects of health systems,” the report concludes.
While Kenya clearly has the ambition for developing PPPs, it seems there is still a long way to go to bring them to fruition. Meanwhile, the healthcare needs of the nation continue to grow.
In early August, the Moi Teaching and Referral Hospital issued two construction tenders to extend its facilities in Eldoret, Kenya. The first tender was to construct the Shoe4Africa Juli Anne Perry Paediatric Cancer Hospital. The second tender was to construct the Harry J. Dyer Paediatric Burns Centre. The deadline for submitting bids was 25 August.
Top photo: Fomenta district hospital, Ghana (Source: NMSI)