AFRICA— The joint venture initiated by U.S. President Joe Biden by Health Finance Coalition and AfricInvest, has announced the injection of the first US$50 million for the pan-African Transform Health Fund (THF) to invest in innovative models of healthcare in Africa.

THF responds to the pressing financing gap for healthcare in Africa which is a US$100 million target fund that will invest in supply chain transformation and innovative care delivery models serving low-income patients.

The THF was publicly highlighted in December 2022 at the U.S.- Africa Leaders Summit in Washington D.C. hosted by President Biden.

THF is an innovative blended-finance fund that will invest in locally led health supply chains, care delivery, and digital solutions in Africa.

Noorin Mawani, Co-lead of the Transform Health Fund said, “Scaling proven solutions in Africa’s healthcare requires adequate investment and innovative financing. THF seeks to apportion risk and return while delivering high impact-focused funding to healthcare businesses that need it most.”

The Health Finance Coalition (HFC) was launched by a group of leading philanthropies, investors, donors, and technical partners convened by the WHO Ambassador for Global Strategy and Health Financing and hosted by Malaria No More.

Ray Chambers, WHO Ambassador for Global Strategy and Health Financing notes that to achieve the world’s ambitious global health goals, we need to urgently scale such efforts, especially as the world recovers from COVID-19 and faces serious macroeconomic headwinds.

Under the management of AfricInvest, a leading pan-African investment platform active across private equity, venture capital, and private debt.

AfricInvest, with its three decades of investing expertise, pan-African footprint, and strong networks, will provide financing to scale critical innovations that contribute to a more resilient health ecosystem.

AfricInvest is a leading pan-African investment platform active in multiple alternative asset classes including private equity, venture capital, private credit, and listed equities.

The Fund also brings together commercial, public, and private donor investments from Royal Philips, Merck & Co., Inc., the U.S. International Development Finance Corporation (DFC), and the International Finance Corporation (IFC).

Also, part of the coalition Swedfund, FSD Africa Investments, Grand Challenges Canada (with funding from Global Affairs Canada), U.S. Agency for International Development (USAID), Netri Foundation, Anesvad Foundation, Chemonics International, and MCJ Amelior Foundation.

The THF will provide debt and mezzanine financing to scale high-impact health enterprises serving vulnerable communities while offering risk-adjusted returns to investors.

Specifically, the THF will target investments across sub-Saharan Africa in three critical areas serving low-income patients: supply chain transformation, innovative care delivery models, and digital innovation.

The Fund is expected to bolster healthcare systems in Africa, which face severe financing and capacity gaps, challenges made more difficult by COVID-19 and climate change, while working to achieve Sustainable Development Goals and Universal Health Coverage.

Martin Edlund, CEO, of Malaria No More and Executive Director of the Health Finance Coalition, “COVID-19 and the mounting pressures of climate change have exposed critical gaps and opportunities for innovation in health financing and delivery in Africa. The Transform Health Fund will play a critical, catalytic role in scaling healthcare solutions that will save and transform lives.”  

Henrik Elschner Pedersen, IFC Regional Director for Manufacturing, Agribusiness, and Services in Africa said that innovative healthcare delivery models in Africa strengthen the reach of quality care to more people, especially in underserved areas.

He acknowledged that IFC’s investment in the Transform Health Fund will bring increased financial support for these innovative models, allowing them to scale, grow, and contribute to sustainable and inclusive healthcare delivery.

Harjit S. Sajjan, Minister of International Development and Minister responsible for the Pacific Economic Development Agency of Canada, “Canada is committed to mobilizing new streams of private and public financing for sustainable development.”

Sajjan also celebrated that through Grand Challenges Canada’s $US 5 million catalytic investment in Transform Health Fund, Global Affairs Canada was proud to support the important work of strengthening healthcare ecosystems in Africa.

The Challenge: Africa Faces a Massive Health Financing Gap

According to Health Finance coalition,  Sub-Saharan Africa is home to 14% of the global population and 20% of the global disease burden, just 16% of annual impact investments target the healthcare sector in Africa.

The UN Africa Renewal publication notes that achieving improved health is a costly endeavour and many African countries have limited fiscal space.

Currently, African countries spend US$8 to US$129 per capita on health, compared to high-income countries that spend above US$4,000.

Additionally, this is due to several factors but most significant among them is a low GDP and low tax collection efficiency among African countries, compounded by low budget allocations to the health sector due to competing priorities.

The U.S-Africa Partnership in Health Cooperation has tried to bridge the significant gap.

The Biden-Harris administration boosts investment and is committed to providing nearly US$20 billion in health programs in the African region. 

Furthermore, this includes nearly US$11.5 billion to address HIV/AIDS, more than US$2 billion to combat malaria, and more than US$2 billion in support of family planning and reproductive health as well as maternal and child health.

An additional more than US$2 billion to address the health, humanitarian, and economic impacts of COVID-19.  

The future of health finance lies in bringing together different types of capital with a common purpose, something we are excited to back through our investment in the Transform Health Fund.

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