Bridging the health gap: Strides in financing Africa’s future

As Africa’s population grows, the demand for resilient health infrastructure, innovative financing and equitable access to care becomes more urgent. Strengthening the health sector not only enhances quality of life but also fuels economic growth by creating a healthier, more productive workforce. 

Investing in Africa's health is an impactful opportunity with both societal and economic rewards.

Currently, Africa faces a significant health financing gap. African nations spend only $83 per capita on healthcare, far below the global average of $1,100. This disparity is largely due to limited domestic resources and financial system constraints. 

However, efforts to close this gap are gaining traction, with substantial contributions from organisations like the Global Fund, the Gates Foundation and Gavi. Their disease prevention, treatment and infrastructure initiatives illustrate the power of global collaboration in reducing disease burdens and building stronger health systems.

Innovative financing mechanisms are emerging to mobilise resources and address Africa's healthcare funding needs. 

Blended finance, which combines public and private capital, is facilitating health projects across the continent. Public-private partnerships (PPPs) in countries like Kenya and Ghana are also helping to bridge the gap by enhancing public healthcare efficiency through private sector involvement. 

Additionally, impact investing—where investors seek both social outcomes and financial returns—continues to attract funding to healthcare initiatives, proving that health investments can yield both economic and social dividends.

Local resource mobilisation efforts are equally promising. Countries are exploring government taxation, insurance schemes, and community-based health insurance as paths toward self-sustaining healthcare systems. 

Rwanda’s community-based insurance model has notably improved healthcare access and vaccination rates, showcasing the effectiveness of locally driven solutions. 

Financial instruments like social bonds and performance-based financing further incentivise health programmes that demonstrate measurable results, prioritising quality and efficiency.

Digital health solutions are also expanding access. Mobile banking innovations such as M-Pesa make healthcare payments and insurance affordable for underserved populations, while telemedicine and mobile health apps bring services to remote areas. The synergy between digital health and fintech highlights the potential of technology-driven solutions in reaching isolated communities.

Policy and government action are essential in fostering a supportive environment for health investments. Many African countries are adopting universal health coverage policies, aiming to increase healthcare access through structured, coordinated approaches. 

Policies that encourage private sector participation and reduce investment barriers are critical to attracting funding and innovation in the health sector. Transparent, supportive regulatory frameworks can enhance investor confidence, particularly for long-term health sector investments.

A resilient health system in Africa will require collaboration among governments, development agencies, private sectors, and local communities. 

Philanthropic contributions, foreign direct investments and impact investing should not replace domestic funding but rather supplement it.

By aligning government priorities with sustainable financing models, Africa is creating a foundation for a more equitable and robust healthcare system, fostering a healthier future across the continent.

Financing Africa’s health future: The vital role of the Health Finance Coalition in supporting health entrepreneurs

It is widely acknowledged that, despite the rise of impact investing, only a small fraction of funds is directed toward healthcare.

Amidst a growing population and a substantial financing gap in health systems, Africa continues to face pressing health challenges.

Organisations like the Health Finance Coalition (HFC) step in to address the complex dynamics between limited healthcare financing and efficient healthcare services. 

In a recent interview in Nairobi, Colleen Connell, Managing Director of the Health Finance Coalition (HFC), highlighted the organisation's dedication to closing the healthcare funding gap by mobilising resources and empowering health entrepreneurs to scale innovative solutions for more effective healthcare delivery.

A central theme of HFC’s mission is bridging the gap between entrepreneurs and investors, particularly addressing the "missing middle" stage where companies struggle to transition from incubation to growth by focusing on capital mobilisation. Through tailored solutions and a robust network, HFC empowers entrepreneurs to expand and thrive.

“HFC was created four years ago to tackle the critical health financing gap across the continent,” she revealed. “There’s a need for both public and private health sectors to grow and develop to provide quality, accessible healthcare.”

Colleen divulges that many health entrepreneurs find themselves “stuck in the shift from incubation to acceleration.” 

HFC’s innovative “capital stack” approach blends different types of financing, ensuring entrepreneurs not only grow but also learn to navigate the complexities of health financing.

HFC collaborates with a diverse range of investors, both local and international.

A recent partnership with AfricInvaVest to launch a $111 million Transform Health Fund exemplifies how African investors are essential in funding their continent's future. 

Additionally, collaborations with development finance institutions (DFIs) like the International Finance Corporation (IFC) ensure a blend of local and international investment efforts.

Since its inception, HFC has mobilised over $250 million, reflecting its commitment to enhancing health outcomes in vulnerable communities.

HFC takes a broad approach to health priorities, focusing on expanding access to affordable, high-quality care. One significant focus is local manufacturing, particularly in producing essential health products, which was accentuated by lessons learned during the Covid-19 pandemic. 

HFC is dedicated to scaling successful healthcare models across regions by utilising a cohort-style support programme that benefits a larger number of companies. They focus on creating new care models and expanding access to care through investments in retail pharmacy chains and last-mile supply chains. 

While primarily working within the private sector, HFC recognises the importance of engaging with governments to support health ministries and promote public-private partnerships. 

Another critical area is digital health solutions, crucial for overcoming geographical barriers in accessing care, especially in rural areas.

HFC uses a multi-pronged approach to identify companies in need of support, including referrals from global health partners, donors, and large NGOs with which it has established relationships.

To foster an ecosystem where innovative healthcare solutions can thrive, HFC is planning to launch's a catalytic capital club that encourages investors to engage with higher-risk, high-impact opportunities. 

HFC's engagement ranges from consistent, week-by-week involvement to tailored approaches that adapt to each company's needs. And Colleen emphasises sustainability as a core aspect of HFC's mission, with their support aiming to empower companies to develop strong growth plans for future independence. 

HFC integrates climate health initiatives into its operations, focusing on climate-sensitive diseases like dengue and malaria. Their comprehensive approach helps companies navigate the challenges posed by climate change while maintaining a focus on healthcare delivery.

By supporting innovative entrepreneurs, fostering investor relationships, and addressing pressing health challenges, HFC is paving the way for a sustainable and equitable healthcare future. Their multifaceted approach not only drives innovation but also ensures that these innovations lead to sustainable, long-term improvements in healthcare access and quality across Africa.

By Pauline Kairu