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Business

Foreign investors jostling to exploit Nigeria’s $82 billion healthcare gap

Several foreign investors are warming up to take advantage of the huge opportunities in the $82billion gap in Nigeria’s health-care delivery system.

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Foreign investors jostling to exploit Nigeria’s $82 billion healthcare gap

The COVID-19 pandemic has highlighted several gaps that require immediate attention in the healthcare system in Nigeria and international investors are seeking to fill the void.

According to CNBC News, Nigeria lags behind relative to its African neighbors in terms of expenditure and access.

READ: How to access CBN’s healthcare grant

For example, Nigeria’s public spending on health care amounts to just 3.89% of its $495 billion GDP (gross domestic product), according to the latest available figures from the World Bank, compared to 8.25% in South Africa and 5.17% in Kenya.

READ: DEAL: Nigerian based Helium Health completes $10m funding round

“According to a recent report from real estate consultancy Knight Frank, Nigeria would require 386,000 additional beds and $82 billion of investment in health-care real estate assets to reach the global average of 2.7 beds per thousand people.

READ: Nigeria Health Infrastructure Development Bank Bill scales second reading at House plenary

What you should know

  • According to the poll conducted by Knight Frank of 140 global investors in June, it found out that 80% were keen on investing in African health infrastructure in the light of the coronavirus crisis and basically on hospital-related real estate and operating companies in collaboration with domestic experts.
  • Prior to the COVID-19 pandemic, there have been broad-based interests in African health-care assets. For example, the International Finance Corporation, part of the World Bank, partnered with the Investment Fund for Health in Africa-II (IFHA-II) in November 2019 to form a $115 million acquisition vehicle for health-care service businesses in the east and south of the continent.
  • Also, some European development finance organizations such as Swedfund, the Swedish development finance institution are as well collaborating with IFHA, along with the likes of Pfizer and the Stichting Social Investor Foundation for Africa, whose sponsors include Aegon, Heineken, Shell and Unilever among others.
  • It is to be noted that the spurred interest from investors is not unrelated to the Nigerian government issuance of N100 billion (about $254.6 million) in state credit facilities for health care, from pharmaceutical companies and product manufacturers to service providers, with the Bank of Industry(BOI) supporting with additional N50billion credit line.

READ: Medical Free Zone to save Nigeria about $1billion in annual medical tourism – NEPZA

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READ: Ministry of Health to launch electronic system for National Health Insurance Scheme

What they are saying

According to Hafeez Giwa, Managing partner at HC Capital Properties (investors in health-care assets in Nigeria):

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  • “There is a very compelling opportunity for the development of world-class healthcare facilities across Africa, but especially Nigeria.
  • “Most of the public hospitals here were constructed over 40 years ago and only a handful have received any investment since then.
  • “On the one hand, there are local institutional investors and local pension funds that, in Nigeria’s case, are Naira investors and do not have any concerns about currency risk.
  • “On the other hand, there are development impact investors and institutions that are excited by the prospect of delivering high-quality healthcare to lower- and middle-income Nigerians.”

READ: Flying Doctors to raise $1 billion to invest in African Healthcare

According to Tosin Runsewe, CEO at health-care investment firm, AfyACare Nigeria:

  • “Obligatory health insurance for federal employees would see insurance costs lowered and the percentage of health-care costs covered could rise to between 20% and 30% by 2030.
  • “If we could attain a critical mass of 40 million to 60 million Nigerians with healthcare cover, the cost of this treatment could be met through health insurance premiums of around only 20,000 Naira ($50) a year, half the current average cost.
  • “There is an array of opportunities for investors in private primary healthcare clinics that can provide services at an affordable cost.”

READ: Benefits of having an immutable ledger to the healthcare system

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Why this matters

Nigeria spends over $1 billion per year for outbound health tourism especially among wealthier Nigerians due to inadequate domestic access.

Making our health care delivery system work more effectively and efficiently would, to a large extent, save this huge haemorrhage and conserve the country’s fast depleting foreign reserves.

READ: CBN holds N30 billion NHIS funds in spite poor coverage of scheme   

Access to comprehensive, quality health care services is important for promoting and maintaining health, preventing and managing diseases, reducing unnecessary disability and premature death, and achieving health equity for all Nigerians.

Johnson is a risk management professional and banker with unbridled passion for research and writing. He graduated top of the class with B.sc Statistics from the University of Nigeria and an MBA degree with specialization in Finance from Ambrose Alli University Ekpoma, with fellowships from the Association of Enterprise Risk management Professionals(FERP) and Institute of Credit and Collections management of Nigeria (FICCM). He is currently pursuing his PhD in Risk management in one of the top-rated universities in the UK.

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Business

Cement prices surge in South East as scarcity, price hike hit North East

Prices of cement have risen by 67% in many Southeastern states and by 40% as observed in northern states including Bauchi, Gombe, Borno, others.

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The prices of cement have risen by 67% in the South-East states of Abia, Anambra, Ebonyi, Enugu and Imo.

This is as some residents of the North-Eastern part of the country also complained of price hike of cement, which they attributed to the scarcity of the product and the activities of middlemen who try to capitalize on the situation.

According to a report from the News Agency of Nigeria (NAN), a market survey conducted at various wholesale and retail shops in the eastern zone shows that the price of the product has almost doubled when compared to the price in 2020.

What the cement traders in the eastern states are saying

A cement dealer at Kenyetta Market in Enugu State, Mr Ifeanyi Amadi, said the increase in the price of the product which started last year was due to the Covid-19 pandemic and increase in dollar exchange.

He pointed out that a trailer load of Dangote cement with 600 bags, which sold for N1.5 million in 2020, sold for N2.3 million in the first quarter of 2021.

Another retailer, Samuel Uwakwe, noted that a bag of Dangote Cement now goes for N3,900, Unicem for N3,700; BUA Cement for N3,700 and Kogi Super Cement for N3,600.

While begging the suppliers to reduce the price and make the product available, Uwakwe expressed his reservations at few individuals being given the opportunity to supply the product noting that the prices would likely crash during raining season.

In Abia, a cross-section of residents of Umuahia, the state capital, also decried the high price of cement, which ranges from N4,000 to N4,100 per 50kg bag.

Those who spoke to NAN said the price hike had further dashed the hope of many Nigerians, wishing to own their personal homes.

A businessman, Mr Victor Ugwu, said he had to suspend his building project because of the current development as he could not afford to continue with the current price of the commodity.

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He said,  “I think the hike can be attributed to the monopoly being enjoyed by the cement producers in the country. Unfortunately, there may not be any respite until that monopoly is broken.”

However, a cement dealer, Mr James Ogbonna, said the price increase had nothing to do with the manufacturers of the commodity but rather put the blame on the activities of shylock distributors of cement.

He said, “In the first and second week of March, we sold a bag for N3,200, but within the third week we started selling at N3,500. By the end of March, the price moved up to N4,000 and now, we sell between N4,000 and N4100, depending on the brand.”

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A cement dealer in Awka, Mr Kenechukwu Okoye, said before the #EndSARS protest in 2020, a 50kg bag of cement was sold at N2,500 bur rose to N3,000 immediately after the protest and from there to the current price of N4,000 and N4,100.

The survey also says that in Owerri, the Imo state capital, the price of cement is between N3,850 and N4300, depending on the brand.

At the building materials Market in Naze, Owerri North Local Government Area, Dangote and BUA cement are sold at N4,000 per bag while BUA and UNICEM are sold for N3,900.

Mr Okechukwu Okonya, a seller, said the cost could be attributed to the high cost of transportation as a result of fuel price increase adding that major dealers sometimes hoard the product in their warehouses to create artificial scarcity.

The survey report says that in Abakaliki, Ebonyi, prices of almost all building materials have gone up, with Dangote and Bua which sold for N2,500 earlier in November and December 2020 now selling for between N4000 and N4500.

Similarly, Unicem cement which also sold at N2,300 within the same period had also gone up to N4,000 and N4,300.

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Similar price increase in North East

The survey report in Bauchi, Gombe, Borno, Yobe, Adamawa and Jigawa, shows an average of 40% increase in price.

According to the respondents, this could be attributed to the outbreak of Covid-19 which affected production in factories, while demand kept rising.

Others, however, blamed the hike on the high cost of transportation and other sundry activities associated with the business of procurement and sales of cement in the country.

Malam Ibrahim Sanusi, a cement dealer at the Gombe main market described the hike as outrageous when compared with the price of the same commodity the previous year.

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He said that a bag of Dangote brand which he bought for N2,400 and sold for N2, 500, is bought for N4,000 from their depot in Gombe and sold for N4,200.

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Business

FG explains why it wants to reduce human contact at the ports, achieves 70% digitalization

This is to help drastically reduce inefficiencies, corruption, diversion of money, revenue leakages and constant delays.

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Container shipping operations from China to Onitsha resume

The Federal Government has moved to reduce human traffic into the Nigerian ports as it says that the ports have achieved 70% digitalization.

This is to help drastically reduce inefficiencies, corruption, diversion of money, revenue leakages and constant delays being experienced at the various ports by stakeholders and other ports users.

This disclosure was made by the Executive Secretary of the Nigerian Shippers’ Council (NSC), Mr Hassan Bello, on Friday at a news conference on the first quarter activities of the council in Lagos.

The NSC boss said that the 70% digitalization was lower than the 90% targeted by the council in the first quarter of 2021, which although it did not achieve, it is still pushing to actualise.

What the Nigerian Shippers’ Council Executive Secretary is saying

Bello in his statement said, “Most of the ports in the world are digitized, Nigeria cannot be an exception. We cannot have a multitude of people going into the ports every day, human contact in the ports is very dangerous, it is anti-efficiency and once there is human contact, there will be corruption and then delay.

Some people don’t even have any business to go to the port but you see them there, what are they doing?

We have been working with shipping companies and terminal operators to ensure we make the deadline we set for the first quarter but we saw it was not feasible to attain 90% digitalization. What we were able to do on the average was 70%, but digitization of the ports is a process in the making. We want this to happen as quickly as possible,” he said.

He said that the port was not a place for contact, as one could move millions of tons of cargo with a computer adding that they were happy to announce that the council was on course.

Bello noted that a non-contact port was the solution to many problems in the system such as delay which caused demurrage, diversion of money, corruption and revenue leakages.

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He said that digitization would make our ports more competitive, noting that the country had competitors in West and Central Africa sub-regions.

On the level of digitalization of shipping companies, he said that Grimaldi had 88%, Ocean Network Express 76%, and CMA CGM 63%, among others, while for seaport terminals, PTML had 92%, and in Port Harcourt, Intels, BUA and Wact had 70% digitalization each.

He said, “Where we are having problems is on reforms and claims processes which is mostly manual but we have some that scored 50%. Also, the second phase is the integration of systems because anybody can be online but there is a need to integrate with the banks for example and even the Nigeria Customs Services.’’

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What this means

The digitalization of operations and reduction of human contact at the ports is going to greatly increase efficiency, reduce corruption and ensure that more revenue comes to government coffers.

This will also help eliminate the illegal activities of louts at the ports, improve on the ease of doing business, promote a clean environment at the ports and tackle the menace of illegal trading activities which also degrades the environment at those facilities.

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