Banks step in to end African medical tourism

News and opinion on finance

“When this virus struck, we found out that only 28% – less than one third – of health facilities in sub-Saharan Africa have reliable sources of energy,” says Amani Abou-Zeid, commissioner for infrastructure and energy at the African Union Commission. “That is frightening.”

Dr Amani Abou-Zeid, African Union Commission 

Covid-19 infection rates in the African continent may be lower than elsewhere as yet, but the pandemic has exposed the urgency of Africa’s healthcare needs and the challenge of meeting them.

“We have an urgent target to make sure all the health facilities have reliable sources of energy,” says Abou-Zeid. “Decentralized power stations, renewable energy, mini and off-grid solutions should be prioritized.”

Multilateral development banks such as the International Finance Corporation (IFC) have announced large targeted financing packages to support healthcare systems coping with the immediate Covid-19 crisis. China has sent planeloads of personal protective equipment to the region.

But bankers say the crisis will also accelerate financing aimed at tackling longer-term, structural problems.

One of these is medical tourism, says NCBA Group chief executive John Gachora. With borders closed, wealthy Africans are no longer able to fly to Europe to seek specialized care, forcing governments to renew their focus on upgrading local systems. 

We have an urgent target to make sure all the health facilities have reliable sources of energy 

 – Amani Abou-Zeid, African Union Commission

“Anyone sick would fly to South Africa or Europe for specialized medicare,” he says. “What has happened – those flight routes to better healthcare can be closed at any time, you need to ensure healthcare is strong, that hospitals used by the slum dweller will be the same.”

Gachora says the Kenyan government struck a key note with its Big Four Agenda when it focused on universal healthcare as a core pillar, alongside manufacturing, agriculture and housing.

“What this crisis shows is that the government choice of the ‘big four’ are the right ones,” he says.


Ade Ayeyemi, chief executive of Ecobank Transnational, agrees that the discovery by the continent’s elites that it is not possible to travel for healthcare will increase the allocation of capital to create better domestic systems.

This will extend to manufacturing drugs and healthcare support infrastructure, he says. “All of those things will take priority as we restart and the concomitant infrastructure that enables them, like energy, will also take centre stage.”

Ayeyemi also notes that the experience of manufacturing facemasks domestically will challenge the notion of “one manufacturing country for the world”.

“There will be the need for manufacturing capabilities in locations to be able to respond to emergencies and because Africa is where there is the least presence of local manufacturing capacity, there will be an allocation of capital to that,” he says.

Maryam Khosrowshahi,
Deutsche Bank

Ecobank is prioritizing financing to healthcare companies. “This is the focus across our footprint provided the deals are bankable,” a spokesperson tells Euromoney.

International banks are also maintaining their commitment to funding critical health infrastructure. On May 14, Deutsche Bank and the Islamic Corporation for the Insurance of Investment and Export Credit announced they are financing the construction of two new regional hospitals and five new medical units in Côte d’Ivoire.

The two new hospitals, one located in Adzope, 105km north of Abidjan, and the other in Aboisso (120km east), will together have a capacity of about 400 beds and will significantly improve the availability of healthcare services in each region, says Deutsche Bank. The hospital construction managed by Moroccan-based Agentis is expected to be finished by October 2020.

These deals have prompted other clients to ask about the financing of similar projects, says Maryam Khosrowshahi, head of sub-Sahara Africa coverage and CEEMEA sovereign DCM at Deutsche Bank.


In January 2019, Deutsche Bank financed the construction of four hospitals in Ghana and in February this year, the Komfo Anoykye teaching hospital. It is actively seeking deals, offering financing through guarantees or with export credit agencies, Myriam Ouazzani, a director at the bank tells Euromoney. She adds that investment in education and energy are also critical.

Myriam Ouazzani, 
Deutsche Bank 

“[For the] Ghana hospital, we are looking at a transaction where the idea is to work to ensure hospitals have access to electricity,” she says. “There is a link between energy and healthcare.”

On April 1, the IFC announced a $2.5 million investment in New Crystal to support the expansion of the private healthcare group, which provides high-quality medical services to lower-middle-income and low-income patients and families in and around Ghana’s capital, Accra.

Having increased their cash holdings at the start of the Covid-19 crisis, investors are now looking to put their money to work in the healthcare, logistics and education sectors, says Mehdi Kaoukabi, fund manager at frontier-focused FIM Partners.

“Now we’re looking to invest in businesses that will structurally recover, like education and healthcare,” he says.

But given the difficult market conditions, investors are looking for higher return opportunities. “Our expectation was usually 10% to 15% returns, but right now it needs to be more like 30%,” he says. “Valuations have opened up and therefore our return threshold for initiating new investments is higher.”