Lagos, Nigeria//- As international donor funding from USAID and other foreign assistance programs for healthcare continues to shrink, leading financial stakeholders convened by HealthCap Africa at its Private Markets & Healthcare Roundtable called for a stronger domestic capital ecosystem to help finance Africa’s critical healthcare needs.
Pension fund representatives at the meeting came from institutions collectively managing more than US$5 billion in assets under management (AUM).
Themed Healthcare as an Asset Class, the invitation-only roundtable was held on 9 September in Lagos, alongside HealthCap Africa’s Annual General Meeting.
The high-level convening brought together regulators, pension fund managers, development finance institutions, healthcare investors and operators to examine how African countries, particularly Nigeria, can mobilise more private and institutional capital for healthcare. Pension funds were identified as one of the most significant pools of capital that could help scale healthcare investment.
Africa carries 22% of the world’s disease burden but receives just 1% of global health spending, with an estimated US$1.1 trillion annual health financing gap. A key theme emerging from the discussion was the need for Africa to move beyond reliance on external healthcare funding. Instead, to build a more diversified and sustainable healthcare financing model in which government, philanthropy, development finance and private capital play complementary roles.
By contrast, in North America and Europe approximately 505 specialist healthcare and life-sciences investment managers have raised more than US$300 billion over the past decade.
The discussion was chaired by Deji Alli, Founder and Chairman of ARM, and co-chaired by Abu Jimoh, Founder and Group CEO of TrustBanc Financial Group. Participants included senior representatives from the Securities and Exchange Commission (SEC), National Pension Commission (PenCom), Africa Finance Corporation (AFC), International Finance Corporation (IFC), World Bank, Stanbic CPFA, FCMB Pensions, PAC Capital, Leadway, PVAC Healthcare, Anchoria, PharmAccess, Afrinvest, ABC Health, ARM Holdco, and FMDQ.
Key practical steps identified at the roundtable to translate the growing interest in healthcare investment into deployable capital:
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Mobilise domestic capital beyond philanthropy. With USAID gone and international funding less certain, Africa needs to mobilise the domestic capital base it already has: pension assets, insurers, family capital, development institutions and entrepreneurs.
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Translate pension interest into investable products. That means the SEC, PenCom, fund managers and institutional investors jointly designing products that meet fiduciary standards while still delivering institutional-grade returns.
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Use DFI fund-of-funds structures to spread risk. The Africa Finance Corporation has offered to share the structure behind its new US$100 million venture capital fund, already deployed into two underlying funds, as a model suited to pension funds seeking to spread risk.
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Create the right policy environment. The World Bank’s Chishamiso Mawoyo stressed that government policy remains important, and that government has a role to play in creating the environment private investment needs to work.
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Keep deepening local capital pools rather than pivot away from innovation, directing more of that momentum toward sectors with massive unmet demand, healthcare among them.
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Match capital to risk. The bottleneck is often the investor-stage match, not the project itself, which means more capital dedicated to the early stage, not only later-stage deals.
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Build the pipeline from private markets to public markets. Big companies are built, not born: they start in the private market, pay tax and create jobs, and only then reach the public market and the stock exchange.
Speaking at the event, Dr Ola Brown, Founder and General Partner of HealthCap Africa, highlighted Quadria Capital’s healthcare-focused investment platform in India and its scale as an illustration of what sustained private investment can build. “Quadria Capital is one of the largest VC funds in Asia focused on healthcare.
They have raised over $1 billion and have an AUM of over $4 billion. As you know, many Nigerians go to India for healthcare. Now imagine how much private capital has gone into building their healthcare sector.” The investment has coincided with a decline in maternal mortality from 384 to 80.5 per 100,000 live births between 2000 and 2023.
“The opportunity here for Africa is not necessarily to replicate India’s model, but to consider what similar pools of specialised capital could achieve for African healthcare.” She added.
Pension funds represent a major pool of capital across African markets, but deploying them into healthcare private markets requires a balance between generating attractive returns and protecting savers. Participants called for continued collaboration between managers, institutional investors and regulators to develop transparent, well-governed and appropriately structured investment products.
Private capital is already contributing to healthcare infrastructure in Nigeria.
Humphrey Oriakhi of PAC Capital highlighted the firm’s financing of a 250-bed multi-speciality tertiary hospital in Gateway, Abeokuta, built entirely with private capital. HealthCap Africa’s own pilot fund has created more than 1,000 jobs in 10 African countries, reaching over 2 million patients.
Speaking on this, Dr Mories Atoki, CEO of ABC Health, said: “There needs to be more early-stage investors. There’s no such thing as an unbankable project. There’s only such a thing as a risk-investor match. Some are early-stage, some are later-stage, and we need to match the right investors, or we need to invest in the early-stage ecosystem if we want to get to growth”
Deji Alli, Founder and Chairman of ARM, similarly highlighted the role of innovation in addressing regulatory and market challenges, noting that “Innovation can overcome regulation.”
Nigeria already has a significant base on which to build. Between 2021 and 2025, the country captured 513 Seed+ deals, representing more than a quarter of Africa’s early-stage activity, and is home to five of the continent’s eight unicorns. Participants argued that the opportunity is now to deepen local pools of capital around sectors with significant unmet demand, including healthcare.
