Africa’s healthcare system is in many ways at the core of the continent’s development – it influences virtually all other sectors, as well as political and social stability. It can also be a viable commercial enterprise, promising substantial returns on investment.
A frica’s health systems sit at the heart of the continent’s development. They shape productivity, household finances, public confidence and even political stability. Healthcare is also a substantial commercial opportunity – one capable of attracting investment and producing competitive long-term returns.
It has been a pleasure to co-edit this special issue of New African with colleagues at the United Nations Economic Commission for Africa. For many of us, the magazine was a constant companion during our formative years: a window on Africa, the wider world and the continent’s place within it.
This issue focuses on financing Africa’s health systems. The timing could hardly be more urgent. Long-standing donors are cutting health assistance just as the continent’s needs are increasing.
Yet health cannot be considered in isolation. That is why this edition also examines industrialisation, the potential of cotton and several other questions central to Africa’s development. A functioning health system depends on a productive economy. A productive economy, in turn, depends on healthy people.
Claver Gatete, the ECA’s Executive Secretary, and I make this case in a joint article. Africa’s health-financing challenge is not simply a health problem; it is an economic one. Health must therefore be placed inside the economic machinery of government. To help achieve this, we propose a National Health Financing Compact. ( See page 38. )
This special issue will be distributed at the United Nations General Assembly in New York, at an important moment of transition for the UN. António Guterres, Amina Mohammed and their team are approaching the end of their tenure, and the international system itself is being tested.
The edition will reach many of the world’s leading decision-makers. But what makes the project especially important is New African ’s reach among Africans themselves. It is read not only by policymakers and business leaders, but also by the people in whose name policies are made.
What do Africans want?
At the ECA Conference of Ministers of Finance in Tangier in March 2026, I posed a simple question: what do the people want?
Afrobarometer surveys provide a clear answer. Across Africa, citizens identify jobs as their most pressing concern. Health comes next. But the two are closely connected: poor health is one of the gravest threats to employment, productivity and household income.
That connection should be the starting point for health policy across the continent.
Reliable healthcare also strengthens confidence in government. Evidence suggests that positive experiences of public health services can increase trust in government substantially. For many citizens, a clinic or hospital is their most frequent – and most consequential – encounter with the state.
The stakes are unusually high. In countries where most medical bills are paid directly by patients, illness is also one of the greatest financial risks a family can face. A serious diagnosis may threaten not only life, but also savings, dignity and family stability. The fear is greater when there is no money for treatment.
A citizen who receives competent and humane care from a public health facility is therefore likely to leave with a better opinion of government. Prioritising health financing is not merely good social policy. It is smart politics.
Poor healthcare may not, by itself, cause a coup. But it steadily erodes the legitimacy and public trust that help protect democratic governments from instability. When citizens lose faith in their government, they may eventually lose faith in democracy itself.
There is another misconception that must be discarded: underinvesting in health does not save money. It merely postpones the bill and converts ordinary costs into crises.
Covid-19 made this painfully clear. Countries that had neglected their health systems did not escape expenditure. They spent more during the emergency, borrowed more heavily and suffered deeper economic losses. Prevention would have been cheaper. Preparedness would have been cheaper still.
The financing gap
African governments must spend more on health. Fewer than five countries consistently meet the commitment made under the Abuja Declaration of 2001 to devote at least 15% of public expenditure to healthcare.
That failure has consequences. Health spending has a powerful multiplier effect: healthier people learn better, work more productively and participate more fully in the economy.
But greater public spending, though necessary, will not be sufficient. Even if every African country met the Abuja target, the continent would still face an estimated annual health-financing gap of about $66bn.
This is a structural problem that public budgets alone cannot solve. It also creates a large opportunity for private capital, particularly institutional capital.
Pension funds, insurers, sovereign-wealth funds, foundations and other institutional investors manage close to $200trn worldwide. That is more than 100 times the combined balance sheets of the multilateral development banks, estimated at $1.5trn. Besides, according to the Africa Finance Corporation’s 2026 Infrastructure Report, the continent holds more than $4.4trn in domestic financial assets across its banking systems, pension funds, insurance companies, sovereign wealth funds, and central bank reserves.
No serious attempt to finance African healthcare at scale can ignore these pools of capital. The challenge is to make healthcare a scalable, resilient and investable asset class.
The underlying economics are compelling. Healthcare in Africa combines chronic undersupply with rapidly rising demand. The continent has too few hospital beds, doctors, diagnostic centres, medicines and primary-care facilities. This is not a saturated market searching for marginal growth. It is a vast unmet need.
Demand is also becoming easier to finance. Africa’s middle class is growing and spending more on healthcare. Governments are gradually increasing health expenditure. Private insurance is expanding, while health-technology platforms are improving billing and payment collection. Together, these developments can produce more predictable and diversified revenue.
The risks, though real, are often exaggerated. Available global data suggest that default risks in emerging markets are frequently higher in perception than in practice. Blended finance – in which public or philanthropic capital absorbs some initial risk – can make well-designed health projects even more attractive to institutional investors.
More than hospitals
Healthcare is not a single asset class. It is a portfolio of them.
It includes hospitals, clinics and diagnostic centres, but also pharmaceutical manufacturing, insurance, telemedicine, digital health records, medical logistics, health technology and specialised financial services.
Health should therefore be treated as core infrastructure: essential to society, capable of being scaled, open to investment and able to generate returns while supporting wider economic transformation.
Pharmaceuticals illustrate both the opportunity and the danger. Africa currently imports between 70% and 90% of the medicines it consumes. This is not only a health concern. It is also an economic and sovereignty problem. Heavy dependence on imports exposes African countries to exchange-rate volatility and global supply disruptions. During a crisis, it can leave the continent dependent on decisions made elsewhere – as the pandemic demonstrated.
Africa now has an opportunity to change this. The African Union has endorsed the African Pooled Procurement Mechanism, which is designed to combine demand across countries, create larger and more predictable markets, give greater priority to African manufacturers and strengthen supply-chain resilience.
Continental strategies aim to increase local production of vaccines, medicines and other health products significantly by 2040. The target is ambitious, but it is achievable if procurement, regulation and financing are properly aligned.
Finding the money –and spending it well
African countries must also mobilise more domestic revenue for health. Carefully designed levies on products such as tobacco, alcohol and sugar-sweetened drinks can both discourage unhealthy consumption and generate substantial revenue.
The African diaspora is another underused source of health financing. Its contribution could extend beyond ordinary remittances to diaspora-linked insurance, investment funds and other structured financing vehicles.
But raising more money is only half the task. Governments must also spend it better.
The World Health Organisation has estimated that between 20% and 40% of global health expenditure is lost through inefficiency and waste. Africa cannot afford such losses. Additional funding must be accompanied by stronger procurement, better data, transparent administration and clear accountability for results.
Prevention is generally far cheaper than treatment, particularly when compared with the cost of managing advanced disease. Primary healthcare should therefore be understood as a form of public-liability management. Money not spent on vaccination, screening, maternal care and early treatment does not disappear from the government’s balance sheet. It usually returns later as a much larger bill.
A whole-of-government responsibility
The central conclusion is simple: health is too important to be left to health ministries alone.
Finance ministries must treat it as an investment in productivity and fiscal resilience. Industry ministries must support pharmaceutical and medical-equipment manufacturing. Education ministries must train the required workforce. Infrastructure and energy ministries must ensure that hospitals have power, water and connectivity. Digital authorities must help build secure systems for health records, insurance and payments.
Healthcare affects employment, growth, industrialisation, household security, public trust and national sovereignty. Too much rests upon it for health policy to remain confined to an administrative silo.
A government that puts health at the centre of its economic programme is not choosing welfare over growth. It is investing in the people who produce growth – and in the institutions that sustain the state.
Prof. Yemi Osinbajo is a Nigerian pastor, lawyer, professor, and politician who served as the 14th vice-president of Nigeria.
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Why health should be economic, not social policy
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