Investors push for more private capital in Nigerian healthcare - Semafor
Nigerian healthcare investors are positioning to take advantage of untapped commercial opportunities in a sector that new research says will generate more than $50 billion in sales by the end of the decade.
Private companies deliver more than 60% of the healthcare services available in Nigeria to serve its 220 million people, but supply remains insufficient. Nigerians spend more than $1 billion annually on medical services abroad, according to the government’s investment promotion agency, and the country imports 70% of its medicines. Health insurance covers less than 10% of the population, and the country’s hospital beds are more overcrowded than those of its West African neighbors.
Nigerians are on track to spend $34 billion on healthcare this year, nearly double the amount spent five years ago, a report by the Health Federation of Nigeria, a non-profit coalition of private sector providers, estimated. Spending will climb to $52 billion by 2030, according to the report. “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. The firm’s parent company, a second-tier Nigerian commercial bank, launched a $15 million healthcare-focused fund last month.
The short supply of hospitals and insurance are only some of the opportunities that can deliver commercial value when the right volume and kind of capital is available, said Dr Ola Brown, CEO of HealthCap, a venture capital firm that has backed a dozen African health and fintech companies. “We want to move healthcare from just a social need that needs to be funded by philanthropists and governments to a real asset class,” Brown told Semafor. “Healthcare in Africa has a narrative problem and not necessarily an exit problem,” she said, referring to decades-old and still current arguments that pit the sector’s ultimate goals of saving lives against commercial incentives.
Pan-African private equity firm LeapFrog Investments sold its stake in East Africa’s largest pharmacy chain Goodlife Pharmacy last year to record the largest private equity-led retail pharmacy exit in sub-Saharan Africa outside South Africa. Investment Funds for Health in Africa, a Dutch private equity fund with nearly $200 million in assets, has recorded 10 exits from investments, two of them in Nigeria.
In terms of securing private capital for healthcare, Nigeria is lagging behind continental rivals. While it makes up about 14% of Africa’s population, Nigeria has received only 8% of the $4.2 billion invested in African healthcare since 2016, according to Africa Health Business, a consultancy in Kenya. South Africa’s share has been nearly three times Nigeria’s receipts.
Meanwhile, government spending is lackluster. Healthcare spending as a percentage of Nigeria’s federal budget for 2026 is 3.7%, the lowest share since 2020, according to a tally by Verraki, an advisory firm in Lagos. This “inadequate” level of public health financing calls for a “long-term, structured investment backed by patient capital,” the firm said in a report in April. The firm estimates that building enough hospital beds to solve Nigeria’s shortage is at least a $12 billion market opportunity.
Analysts say the naira currency’s depreciation over the last three years, due to Nigeria’s economic policy revamp, highlights the macroeconomic risks that may put off investors in the economy, including in healthcare. Still, there is money to be made in the sector: Nigerian hospitals and clinics will generate up to $7.6 billion in revenue this year “assuming stable macroeconomic and policy conditions,” the Health Federation of Nigeria report said.
