|How do you raise the funds you need to scale up a healthcare venture in Nigeria? How do health sector entrepreneurs attract investors and funders? How can government create an environment for investors to fund health care projects and where health innovations thrive in Nigeria?
Nigeria Health Watch together with the World Bank Group put together a forum to discuss these and other health financing questions in a unique, post-conference workshop. This workshop followed the 2018 Future of Health Conference which focused on the contributions returnee health professionals are making to the Nigerian health sector. The workshop themed, “Financing Healthcare Investments in Nigeria – Role of the Diaspora” brought an interesting mix of health professionals, entrepreneurs, investors and government to the table to chart a path to improving health outcomes for Nigerian patients. While everyone has something to offer on how to develop our health sector, there are rarely opportunities for doctors and senators, entrepreneurs and bankers to come together on the same table to discuss healthcare. It is in the mix that you often find innovative solutions – and that was the reason for the workshop. Conventional thinking has failed to provide adequate solutions, so it was time to think differently.
Dr. Olumide Okunola set the scene by listing three investment strategies for health professionals looking to setup practices in Nigeria. Photo credit: Nigeria Health Watch
Dr. Olumide Okunola, a healthcare program manager at the World Bank’s International Finance Corporation (IFC) set the scene by listing three investment strategies for health professionals looking to setup practices in Nigeria; they could work with existing public institutions in a public-private partnership, take the purely private investment route and source for private funding, or put in place a social entrepreneurship approach where grants would be the main source of funding.
Looking around the room, you could feel the initial scepticism- if only it was that easy! Many diaspora health professionals who have returned to Nigeria shared their experience, mostly of multiple challenges with accessing funds to start or scale-up their practices. Many spoke about series of failed attempts at raising funding from normal sources and how they eventually had to take huge personal financial risks.
Other speakers at the workshop, from a wide range of expertise in funding, investment, business development, and government shared valuable insights on steps to surmount these challenges.
Emmanuel Adeshina noted that many Nigerians in the diaspora are unaware of the Nigerian investment landscape. Photo credit: Nigeria Health Watch
Emmanuel Adeshina of the Nigeria Investment Promotion Council (NIPC) said that only 30% of funds remittances from the diaspora, which he said stood at 15 million people as at 2017, go into direct investments! The remaining 70% are used to take care of primary responsibilities related to the needs of relatives and other indirect investments like real estate. He noted that many Nigerians in the diaspora are unaware of the Nigerian investment landscape and its inherent opportunities and have developed a general perception that the business environment in the country is unfriendly. As an agency set up to encourage investment in the country, NIPC has developed investment incentives for various sectors, and Adeshina said the agency is working with the Federal Ministry of Health to design more incentives for the health sector, with the goal of promoting the health sector as a viable business venture.
“Health professionals need to spend time to understand finance, because emotions don’t get financed, only a bankable business plan does,” Engr. Chidi Izuwah. Photo credit: Nigeria Health Watch
Engr. Chidi Izuwah, Acting Director General of the Infrastructure Concession Regulatory Commission (ICRC), made a case for Public-Private Partnerships (PPP) and why it is important for the private sector to provide care which the government will purchase. “Development in the health sector must be spearheaded by the government”, he added. He argued that the problem with healthcare investments is not financing but funding, and health professionals need to understand the difference between the two to make business cases that are bankable. He argued that funds are available but there is a dearth of bankable proposals and businesses. “Health professionals need to spend time to understand finance, because emotions don’t get financed, only a bankable business plan does,” he said. He also maintained that Nigeria’s over-investment in tertiary healthcare creates results in a scenario of healthcare being more expensive than it should be.
Dr. Afolabi Ogunlesi listed top investment opportunities as healthcare financing, life sciences, health management organisations, hospital chains, pharmaceutical products, physiotherapy centres, ambulance services and education. Photo credit: Nigeria Health Watch
Dr. Afolabi Ogunlesi, Managing Partner at Vesta Healthcare emphasised the need to make data-driven business pitches to increase the chances of getting funding for health ventures. Trends such as the increase in non-communicable diseases (NCDs) and increase in personal wealth are important drivers of growth in health care provision in Nigeria. He said evidence from research which looked at the healthcare landscape in 16 Nigerian states revealed that the top destinations for healthcare investments were Lagos, Abuja and Port Harcourt in order of priority. He listed top investment opportunities as health care financing, life sciences, health management organisations (HMOs) serving at least 80,000 clients, hospital chains with at least 50 bed spaces per hospital, pharmaceutical products, physiotherapy centres, ambulance services and education. He noted that despite the interest in diagnostic centres, the evidence available shows that they are not viable long-term investments, probably because of the cost of equipment.
“Our aim is to ensure that everyone, both the rich and poor can confidently visit any PHC to access health care,” Senator Lanre Tejuoso. Photo credit: Nigeria Health Watch
Senator Lanre Tejuoso, Chairman Senate Committee on Health, admitted that government has not done enough to improve healthcare at the primary healthcare level, with HMOs primarily serving Nigerians in the middle and upper class. “Our priority now is how do we make 10,000 health centres functional so that they can offer basic health services for any Nigerian,” he said, adding, “the National Assembly is proposing that every Nigerian must make a mandatory contribution of at least N200 towards health care. Our aim is to ensure that everyone, both the rich and poor can confidently visit any PHC to access health care”.
“We still rarely invest in ideas without a cash flow. There needs to be evidence of growth. And there needs to be a team,” Dr. Ola Brown. Photo credit: Nigeria Health Watch
Dr. Ola Brown, founder of Flying Doctors Nigeria, offered a slightly more controversial view, saying that it is understandably difficult to “see profit at the bottom of the pyramid“. Dr. Brown said it’s easier to invest in businesses with cash flow and a proven track record than an idea that hasn’t been tested. She advised health professionals to use personal funds when starting and seek funding when they are ready to scale and have records to back their business plans. “We still rarely invest in ideas without a cash flow. There needs to be evidence of growth. And there needs to be a team,” she said.
Mr. Tomiwa Williams noted that healthcare providers usually concentrate on the healthcare side of the health business and lose sight of the business side. Photo credit: Nigeria Health Watch
Mr. Tomiwa Williams of World Bank’s IFC said the Bank, which normally focuses on government and has come up with the Private Sector Window (PSW) for businesses in the Niger-Delta and the Northeast in order to serve those at the bottom of the pyramid. Williams further noted that healthcare providers usually concentrate on the healthcare side of the health business and lose sight of the business side. One way around this is to leverage on partnerships and take advantage of co-ownership in business, he noted.
Dr. Kanyisola Oyeyinka said health entrepreneurs could get help for business plans from those who understand the business side of healthcare. Photo credit: Nigeria Health Watch
The consensus at the end of the engaging five-hour session was that there is a need for government to take the lead in healthcare financing in order to create an enabling environment that the private sector can continue to support. There was also an agreement that health entrepreneurs should make evidence-based business cases and seek more collaborations and assistance when necessary. Dr. Kanyisola Oyeyinka, Healthcare Investment Adviser at the Nigeria Sovereign Investment Authority (NSIA) said they could get help for business plans from those who understand the business side of healthcare.
“As you build innovation in the private sector in healthcare in Nigeria, keep the pressure on the public health system too,” Maina Sahi. Photo credit: Nigeria Health Watch
“Don’t try to do it alone,” was an important advice from Maina Sahi, Director Strategy, Education and Health at the CDC Investment Group. She pointed out the importance of building a strong management team, bringing expertise from people outside the medical team and ensuring that funds are gotten from the right partner that works for the whole team and the business. However, attention must not shift from the public health sector, she noted. “As you build innovation in the private sector in healthcare in Nigeria, keep the pressure on the public health system too,” she said.
Akua Gyekye shared health communication innovations from Facebook that help save cost and influence health behaviour by delivering the right messages to the right audience at the right time. Photo credit: Nigeria Health Watch
Akua Gyekye, the Public Policy Manager for Africa at Facebook shared the work her organisation was doing in the health sector. The changing media landscape has shown the important role that social media plays and the fact that it is a leading source of (health) information for many people. It was important for the health care practitioners to understand the ways that Facebook had partnered with organisations to pass on health information, and the steps they were taking to ensure that accurate information was being disseminated on Facebook. Facebook also offers opportunities for returnee health practitioners to form communities that could enable information sharing about opportunities in the health care industry.
Participants at the workshop may not have received immediate funding for their healthcare businesses, but they definitely left with better insights into understanding the necessary requirements in order to seek the financing they needed for their healthcare ventures. The workshop was an incredible opportunity to network with experts who could provide pertinent advice to finance their healthcare ventures. A report from the workshop with key outcomes and next steps will be shared as we continue this important conversation.
As the brain gain in Nigeria’s health sector works to contribute its quota in improving health outcomes, financing is a key concern many will face as they return. Government ownership of the health financing space will provide the enabling environment both health entrepreneurs and investors need to foster innovative, efficient and sustainable healthcare services for all tiers of the Nigerian population. The opportunities abound, and the Nigerian patient, indeed, is worth it.