With Africa’s public health systems perennially overburdened, millions across the continent are turning to private providers for their healthcare needs. The World Health Organization (WHO) estimates that 35% of outpatient care in sub-Saharan Africa is delivered by the private for-profit sector.
Across sub-Saharan African countries, reliance on private providers is most pronounced in Nigeria, where the private sector handles a little over half (52%) of all outpatient visits. In North Africa private providers are particularly dominant, providing on average 66% of outpatient services and 53% of inpatient care.
The WHO notes that the private sector in Africa caters to “all wealth quintiles” including the poor. Indeed, in many rural or low-income urban areas most families rely on nearby private clinics and hospitals for basic health services.
Private care more reliable but costlier
Compared to public hospitals, private facilities tend to be more physically accessible, adequately resourced and better governed. They are associated with higher-quality treatment and more reliable customer service. Unsurprisingly, they are costlier than public hospitals.
For basic health services, poorer households are often willing to pay the premium that private providers charge relative to public facilities. However, for emergency treatment, specialised care and extended hospital stays, the amounts charged by private facilities are typically substantial and out of reach to all but a wealthy minority.
At the very top of the private care market, some entrepreneurs have managed to turn healthcare into an export. Medical tourism is booming in several parts of Africa, led by private healthcare firms in South Africa and Tunisia. Affluent patients from around the world fly to these countries seeking specialised care, with fertility treatments, cosmetic surgery, cardiology and oncology among the most sought-after services.
International clients typically choose South Africa and Tunisia over other destinations because procedures cost far less than in other medical tourism hubs; doctors are often trained abroad; the providers invest heavily in modern facilities; and patients can combine their medical visit with traditional tourism.
South Africa and Tunisia mostly attract patients from Europe looking for world-class care on a tight budget. Egypt, Ghana, Nigeria and Kenya have also emerged as high-growth medical tourism markets, serving clients from across their respective regions and globally.
Private insurance largely tied to formal jobs
Private insurance firms have long provided health cover to clients across African markets, but coverage remains uneven across the continent with the size and maturity of the industry varying sharply by country.
South Africa has by far the largest and most sophisticated private health insurance market on the continent. Egypt and Morocco are more advanced than most of the continent, while Nigeria, Ghana and Kenya have emerged as regional champions. Despite the disparities, the private health insurance model is consistent across all African markets in one crucial respect: coverage is largely tied to formal employment.
Employer-backed schemes account for the bulk of private health cover in Africa. This makes competition between underwriters intense, given that there are significantly fewer employers to target compared with more developed economies. An overwhelming majority of Africa’s workers are in the informal economy.
Standing out as an underwriter in Africa requires more than just offering employers competitive pricing, argues Lee-Ann Dobrescu, head of operations at Hollard Health, an underwriter licensed in more than a dozen African markets and part of Hollard Insurance Group, one of South Africa’s largest privately-owned insurance groups.
Insurance companies, she contends, must help employers turn health coverage into a strategic tool to attract and retain talent, given the persistent shortage of skilled professionals across many African markets.
“There is a growing realisation in companies that are looking for skills that health is a key benefit that employees look at… they will see the level of health insurance that you can offer as a differentiator,” she tells African Business.
She notes that international health coverage is increasingly finding its way into employment offers from top organisations targeting highly skilled local professionals and expatriates. These plans, she explains, provide added financial protection when “the really big things happen” and offer access to quality care abroad if needed.
Impact investors bullish on healthcare
Healthcare firms in Africa looking to scale their operations are increasingly turning to impact investors for funding. These mission-driven investors channel capital into businesses that deliver both strong financial returns and measurable social outcomes.
The primary aim of impact investors in African healthcare is to reach under-served populations with affordable, quality healthcare services while still generating strong financial returns, argues Biju Mohandas, partner and global head of healthcare investments at LeapFrog Investments, which has nearly $3bn in assets under management across all its funds.
Mohandas points to Goodlife Pharmacy, East Africa’s largest pharmacy chain, as a case study. LeapFrog first invested in Goodlife in 2016, when the chain had fewer than 20 outlets in Kenya. Goodlife grew to nearly 150 outlets serving some 3m people across Kenya and Uganda. The chain also introduced diagnostic services, chronic illness management and digital health tools to complement the core retail business. In 2022 LeapFrog sold a partial stake to CFAO Healthcare, part of Toyota Tsusho Corporation. It sold its remaining stake in July 2025.
Recruiting a competent management team that truly understood the local market dynamics in East Africa helped Goodlife scale up rapidly, Mohandas says. “We helped engineer a transition of the management team,” he tells African Business.
“When we acquired the company, the management team was good. They bought in global best practices and ex-employees of storied pharmacy chains like Boots [a UK pharmacy chain]. They did a good job creating the fundamentals that helped grow Goodlife, particularly on the quality front.”
“However, we felt that it is very important in a retail business to understand the local context. So we brought in a CEO, CFO and chief quality officer who were Kenyans… they were very good, they were able to bring in cost savings, for instance, because they knew how to negotiate the rents and get the right leases. They were able, with our support, to catalyse inorganic growth because they had relationships with some other smaller chains that we could go and acquire,” he adds.
Mohandas is bullish on the long-term outlook for African healthcare. He argues that rapid population growth and a shifting disease burden are driving demand for quality services.
“The opportunity is very much there. This is a continent of more than a billion people, many of them young. And the demand is shifting – from communicable diseases like malaria and HIV to non-communicable conditions such as diabetes, hypertension and cancer.
“Not to say that we are trivialising communicable diseases. It is still a far bigger problem than it should be. But one can definitely see the shift happening – more of morbidity, mortality, prevalence, incidence – is shifting towards chronic illness.”
The challenge is that much of this need has yet to translate into demand. This, Mohandas argues, is largely because most Africans are completely shut out of any form of public or private insurance. Lack of insurance coverage makes basic care and specialised treatment for chronic conditions unaffordable despite rising needs.
“What is the difference between need and demand? It is essentially affordability, the ability to pay. And there we have a major problem.”