After USAID: who will finance Africa’s healthcare future?

Africa’s healthcare systems have historically relied on government funding, philanthropy and external development funding. But as governments face increasing fiscal pressure and international funding becomes less certain, a pressing question is emerging: who will finance Africa’s healthcare future?

The question was at the centre of HealthCap Africa’s Healthcare as an Asset Class: Private Capital Roundtable, which brought together investors, development finance institutions and regulators to examine the role of private capital in strengthening Africa’s healthcare sector.

With USAID gone and other international funding becoming less certain, there is a growing need to mobilise more domestic capital into healthcare.

The discussion also highlighted the importance of private markets in building businesses that can eventually become major contributors to the wider economy. Big companies are built over time, starting in private markets before growing into larger enterprises that create jobs, pay taxes and, in some cases, list publicly.

Historical data from the U.S. shows that post-1970s ERISA reforms doubled top company creation, while 20% of the top 300 U.S. public companies can be traced to venture capital market reforms.

Healthcare is already a major global investment sector

Healthcare has become a significant private-market asset class, with more than 505 specialist funds across North America and Europe raising $320 billion solely for healthcare.

Emerging-market investors such as Quadria Capital have also built multi-billion-dollar healthcare platforms, with more than $4.2 billion in assets under management.

These examples demonstrate the value of specialist investors with the expertise required to understand healthcare businesses and markets.

Africa, however, continues to face a significant healthcare investment gap. The continent has a high burden of disease but comparatively low levels of private healthcare investment.

Maternal mortality, child mortality and surgical outcomes remain major challenges, while governments face increasing fiscal constraints.

India offers a useful example

India’s approximately $19 billion in private equity and venture capital investment in healthtech over a decade coincided with a decline in maternal mortality from 384 to 80.5 per 100,000 live births between 2000 and 2023.

Quadria Capital’s healthcare-focused investment platform also illustrates the scale of private capital that can be directed towards the sector.

The experience raises an important question for Africa: what could sustained private investment achieve for the continent’s healthcare systems?

Mobilising domestic capital

The roundtable highlighted the need for private capital to complement government funding and philanthropy.

Pension funds represent one of the largest pools of domestic capital across African countries, including Nigeria. The challenge is creating the appropriate regulatory structures that allow pension funds to participate in private markets while protecting savers.

Nigeria also has a strong foundation on which to build. Between 2021 and 2025, the country recorded 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.

The opportunity is to deepen local capital pools around sectors with significant unmet demand, including healthcare.

Matching capital with the right stage

Mories Atoki, CEO of ABC Health, highlighted the need for more early-stage investors and better matching between businesses and investors.

“There’s no such thing as an unbankable project. There’s only such a thing as a risk-investor match.”

She noted that some investors are suited to early-stage companies while others are better positioned for later-stage businesses, making a strong early-stage ecosystem critical to getting companies to growth.

Private capital is already contributing to healthcare infrastructure in Nigeria. Humphrey Oriakhi of PAC Capital spoke about the development of a 250-bed multi-specialty tertiary hospital in Gateway, Abeokuta, built with private capital.

Deji Alli also noted that “Innovation can overcome regulation,” highlighting the importance of finding innovative approaches to some of the regulatory challenges facing private investment and business growth.

The role of DFIs and regulators

Development finance institutions also highlighted the need to mobilise local capital.

The African Finance Corporation (AFC), represented by Jeane Koffi Stephane, said it was willing to share learnings from its fund-of-funds structure, which could help pension funds spread investment risk. AFC recently launched a $100 million venture capital fund and has already invested in two funds.

The IFC, represented by Dr. Olumide Okunola, emphasised the importance of mobilising local capital into healthcare, while the World Bank highlighted the role of government policy in creating an enabling investment environment.

PenCom and the SEC also pointed to the evolution of Nigeria’s regulatory framework. While investment has historically been heavily weighted towards fixed income, regulators are increasingly recognising the role of alternative investments in generating returns and supporting economic growth.

Can Africa finance more of its own healthcare future?

The roundtable highlighted the growing need to rethink how healthcare is financed across Africa.

With government budgets under pressure and international funding becoming less certain, private capital and domestic institutional investors will have an increasingly important role to play.

The experience of other markets, the growth of specialist healthcare funds, the potential of African pension funds and the private capital already flowing into healthcare all point to one central question: how can Africa mobilise more of its own capital to finance the healthcare systems it needs?

For HealthCap Africa, the roundtable was an opportunity to bring investors, development finance institutions and regulators into the same conversation around healthcare as an investable asset class.

About HealthCap Africa

HealthCap Africa is a pan-African venture capital firm focused on investing in early-stage healthtech and fintech companies across Africa. The firm backs businesses working to improve access, affordability and quality of healthcare and financial services across the continent.

Founded by Dr. Ola Brown, Founder and General Partner, HealthCap Africa has invested in more than 16 portfolio companies operating across multiple African markets. Its portfolio companies have reached more than 2 million patients and users, created more than 13,000 direct and indirect jobs, and collectively raised nearly $100 million in follow-on capital.

The firm’s investment approach combines capital with sector expertise and hands-on support, reflecting its focus on building businesses that can deliver both commercial value and measurable impact across Africa.