Axa Mansard Insurance, a Lagos-based insurer, has partnered with African Capital Alliance (ACA) and the International Finance Corporation (IFC) to support the development of an ultra-modern hospital Axa Mansard Hospital whose establishment cost is estimated at $82 million (N32 million).
The proposed hospital development is coming at a time when Nigeria’s health sector is at its lowest level, with the World Health Organisation (WHO) ranking Nigeria’s health system performance 187 out of 190 countries it surveyed. Nigeria’s Presidend Muhammadu Buhari left the country on January 19, 2017, on what was supposed to be a 10-day holiday. He spent almost two months in London where he went for what turned out to be a medical tourism, returning on Friday, March 10.
Christopher Murray, WHO’s Director of Global Programme on Evidence for Health Policy, said in the website of the world’s biggest funder of health projects, that although some countries achieved some progress in the past decades, countries like Nigeria are under- utilizing the resources that are available to them.
“This leads to large numbers of preventable deaths and disabilities; unnecessary suffering, injustice, inequality and denial of an individual’s basic rights to health,” he said.
Sources close to the deal said that ACA, a frontline private equity firm with headquarters in Lagos, Nigeria, has committed to injecting an equity capital of up to N16 billion ($41 million) in the hospital project; ACA will make its equity investment in the project through the Capital Alliance Private Equity IV (CAPE IV) fund. The insurer will provide N7 billion of the equity portion of the development cost.
BusinessDay learnt that IFC, the private sector and development finance arm of the World Bank Group, will likely invest another N7 billion in the project as equity commitment if its board of directors approves the deal on April 30 when it is expected to make its decision on the matter.
A special purpose investment vehicle will be created to develop the project, in which a distinct Mauritius-based holding company will invest.
WHO said that most of the lowest placed countries are in the sub-Saharan Africa where life expectancies are low. HIV and AIDS are major causes of ill-health; healthy life expectancy for babies born in 2000 in many of these nations has dropped to 40 years or less as a result of the AIDS epidemic.
The WHO report had said that the main failings of health systems in countries like Nigeria arose because most doctors work simultaneously for the government for themselves in private practice.
“This means the public sector ends up subsidizing unofficial private practice,” the report said.
Furthermore, the government has failed to prevent a “black market” in health, where widespread corruption, bribery, “moonlighting” and other illegal practices flourish. The black markets, which themselves are caused by malfunctioning health systems, and low income of health workers, further undermine the country’s health system.
The WHO health systems report recommended that that countries to extend health insurance to as large a percentage of the population as possible.
The hospital project, whose development will be funded by a combination of equity and debt in equal proportions, will house a 150-bed multi-specialty hospital and two 10-bed primary health care centers. It will be located in the Lekki area of Lagos, with one clinic each on the Lagos Mainland and the Lagos Island areas.
With the above funding structure, African Capital Alliance will likely own 40 per cent of the hospital; IFC will own 20 per cent; Axa Mansard Insurance will own 20 per cent of the hospital.
Nigeria’s health ministry often focus on the public sector and often disregard the frequently much larger private sector health care – the Axa Mansard hospital project is expected to fill this void.
INNOCENT UNAH
