Nigeria's $34bn healthcare bill has attracted $336m of tracked investment since 2016

Eight percent of $4.2bn is about $336m, and that is what a decade of tracked healthcare investment into Nigeria adds up to ^[15][1]. Against $34bn of spending in a single year, the entire ten-year total is worth about 1% of one year's bill ^[2]. Verraki, a Lagos advisory firm, put at least $12bn on the market opportunity in closing Nigeria's hospital bed shortage, which is 800 times the $15m fund FCMB Pensions' parent launched last month ^[19][9][3]. Verraki called the level of public health financing "inadequate" in an April report, and said it calls for "long-term, structured investment backed by patient capital" ^[18].

Getting from $34bn to $52bn in four years is about 11% a year compounded in dollars, or rather compounded in a dollar figure derived from spending that happens in naira ^[4]. The Health Federation of Nigeria attaches a condition to its own work: hospitals and clinics will generate up to $7.6bn this year "assuming stable macroeconomic and policy conditions" ^[21]. The naira's depreciation over the last three years, a product of Nigeria's economic policy revamp, is the macroeconomic risk for investors ^[20]. No naira series is in the material, so the near-doubling over five years cannot be split between more treatment bought and higher prices paid.

That $7.6bn is 22% of the $34bn ^[5]. Hospitals and clinics collect under a quarter of what Nigerians spend on health. Most of the rest goes to medicines, 70% of them imported ^[3], and to the more than $1bn a year Nigerians spend on medical services abroad, according to the government's investment promotion agency ^[6]. Across 220 million people, $34bn is about $155 each ^[5][6].

Ola Brown is CEO of the venture firm HealthCap, which has backed a dozen African health and fintech companies. She told Semafor: "We want to move healthcare from just a social need that needs to be funded by philanthropists and governments to a real asset class" ^[10][12]. She also said "Healthcare in Africa has a narrative problem and not necessarily an exit problem" ^[11]. The exits on the record are thin in Nigeria specifically. LeapFrog Investments sold its stake in Goodlife Pharmacy, East Africa's largest chain, last year. That was the largest private-equity-led retail pharmacy exit in sub-Saharan Africa outside South Africa ^[13]. Investment Funds for Health in Africa, a Dutch fund with nearly $200m in assets, has placed two of its ten exits in Nigeria ^[14].

"There is a compelling opportunity because Nigeria has a significant gap in our healthcare system," Yemi Sadiku, an executive director for investments at FCMB Pensions, told Semafor ^[8]. The gap is measured. Whether it is bankable turns on who pays. Insurance covers less than 10% of the population ^[4], so most of the $34bn is household cash handed over at the point of service. That gives a lender no contracted revenue to discount. Nigeria holds 14% of Africa's people and 8% of the healthcare money, a per-head share about 0.57 of the continental average ^[15][8]. South Africa's receipts, nearly three times Nigeria's, come to just under $1bn of the same $4.2bn ^[16][7]. If insured coverage is still under a tenth of Nigerians in 2030, the $52bn stays a household bill. The slice an operator can underwrite stays close to the 22% that hospitals and clinics collect ^[5].