Public Private Partnerships and the Nigerian Healthcare System

A committee is a cul-de-sac down which ideas are lured and then quietly strangled.

Sir Barnett Cocks (1907-1989)

Following years of neglect and paucity of investments, Nigeria currently faces burdensome infrastructure challenges.  A 2010 projection estimated that the country would need to expend about $15 billion annually for at least six consecutive years to meet up with basic infrastructure requirements. Infrastructure challenges have stifled innovation, trade and numerous industries like manufacturing, agriculture, tourism and health.

The traditional procurement model of governments funding infrastructural development through fiscal budgets has become very unattractive and perhaps impossible due to burgeoning budgetary deficits, governmental inefficiencies and waste.

 

The Nigerian government has embraced the Public Private Partnerships (PPP) model as a potential solution and established a regulatory commission to foster cooperation between the public and private sectors and to oversee infrastructural concessions.  Following this development non-governmental groups sprouted to support and advocate PPP development in Nigeria.

The Lagos state government has taken advantage of this developmental model and has recorded a string of successes. On the flip side, a 25-year concessionary agreement between the federal government and a private consortium, for the rehabilitation of the Lagos-Ibadan expressway, which was revoked last year, has become a case study on the possible fate of the federal PPP model in Nigeria.

The mismanagement of that concession gave rise to speculations “that the PPP model as a mechanism for public infrastructure development in Nigeria may have already fallen victim to the same systemic distortions that have bedeviled the traditional procurement (contract award) system.

The infrastructural deficit is not limited to the transportation sector alone. It cuts across all economic sectors but nowhere is it more mind-boggling and calamitous than in the health care sector, considering our health status as a people. Healthcare spending as a percentage of GDP peaked at 7% in 2007 and is on a downward trend.

The government has rightfully acknowledged that it lacks the wherewithal to unilaterally provide for the health needs of its population. In the health minister’s own words, while inaugurating a 20-man committee to develop private sector-led health infrastructure initiatives,…

“In the circumstances, it’s quite obvious that government alone cannot provide all the health facilities needed to provide adequate healthcare services to the teeming population, now at 167 million and expanding.”

Tony-Elumelu

The committee is chaired by Mr. Tony Elumelu, a well-respected and accomplished economist, entrepreneur and philanthropist, who firmly believes that “no one can develop us but us”. The committee is tasked with the fast-track building of at least one world-class hospital and one diagnostic centre in each of the geo-political zones, through public private cooperation.

This initiative by the Nigerian government is very laudable. As reported in the article on the committee inauguration, Mr. Elumelu is said to have demanded that the minister grant the committee access to reports of the committees previously set up in the sector in order to facilitate the work of the new committee.

From all indications, Mr Elumelu means business and I am counting on his pedigree, track record and influence to overcome a peculiar and worrisome problem of government and  bureaucratic inertia, which has been elevated to an art form among us. Hopefully, his work would not be an addition to a long list of overlooked committee reports and whitepapers that accumulate dust while the status quo remains.

I am also eagerly looking forward to indicators of progress and continued government interest in this venture by way of policy discussions, guidelines, project announcements or legislation.

From insights gathered during discussions with professional colleagues interested in investing in the Nigerian healthcare sector, it would be interesting to see if the committee puts out any framework(s) for specific aspects of care, like maternity care, cardiac care, kidney care etc. This is important, because while the government is apt to think holistically, private investors may be more keen on specialized models of care provision and in smaller infrastructure projects that require less financing.

Lastly, I am hopeful too, that any private health infrastructure concessions that are granted will not travel down the highway to oblivion, like that of the Lagos-Ibadan expressway.

Acknowledgements: (i) John St. Claret Ezeani, for expert information and reference materials on Public Private Partnerships & (ii) Ogo Egbuna, physician and nephrologist, for providing insight into different possible PPP care models.