African Development Bank head urges multilateral development banks to drive healthcare financing


Africa will never again be caught flat-footed at the outset of another health pandemic, African Development Bank Group President Dr. Akinwumi Adesina stressed on Monday at the World Health Summit in Berlin.

Adesina—who was a panelist in a session of the summit titled “Game Changer: a new lens on investment in health and well-being”—deplored the adverse situation that African countries found themselves in at the very end of the global queue for vaccines when Covid-19 ravaged populations over its rapid global spread.

This situation, Adesina said, had prompted the African Development Bank to take innovative steps to address both the impact of the pandemic in Africa and healthcare financing for the region more holistically. He said this included the issuance of a historic $3 billion social bond(link is external). His key message to the summit was that innovative investment by multilateral development banks was critical to drive healthcare financing for developing countries.

The African Development Bank recently established a healthcare(link is external) defense system built on three pillars: revamping Africa’s pharmaceutical industry, building the continent’s vaccine manufacturing capacity, and building its quality healthcare infrastructure. Adesina said the bank was investing $3 billion in the pharmaceutical industry and had set up the African Pharmaceutical Technology Foundation, which would deal with intellectual property rights and access to proprietary technology to allow Africa to manufacture its drugs and build its own ecosystem for capacity in this area.

Both former UK Prime Minister Gordon Brown—who is World Health Organization (WHO) Ambassador for Global Health Financing—and Adesina stressed the importance of innovative financing and better leveraging the global financial system to meet the challenges of funding global health.

Brown said it was important to make private capital and capital markets work for developing countries.

“As environmental, social and governance (ESG) becomes mainstream,” he said, “I hope one of the messages from today is that clear performance indicators for health has to be that a core element of ESG is expanded into ESG-H.”

He said public sector funds and concessional finance could catalyze private investment so that private enterprise is no longer just about risk and reward but risk reward and socially progressive results.

Highlighting his vision for the private sector as part of the African Development Bank’s health strategy, Adesina called for greater capital optimization by multilateral development institutions to drive development in healthcare and other areas.

Adesina said some $145 trillion of assets globally had not been optimized. “If we are going to tap into these globally available assets as multilateral development banks, we must make sure that the capital adequacy of the multilateral development bank is used effectively. Africa has $2.1 trillion of assets under management that have not been optimized. We must look at how we use our traditional multilateral financial institutions to significantly leverage these assets,” he posited.

The African Development Bank chief said raising the needed money from the private sector meant raising risk capital, which was what needed to be leveraged. “Our capital structure at the African Development Bank is largely callable capital. So, the issue is how multilateral development banks can enhance the quality of that callable capital in the rating of credit rating agencies. So, we can raise long-term money to support what we are doing.”

Adesina called for the use of such innovative mechanisms as deploying International Monetary Fund special drawing rights to investments for development, the issuance of social bonds, and securitization.

Other speakers on the panel were Sir Ronald Mourad Cohen, UK Chair of the Global Steering Group for Impact Investment; Dr. Jayasree K. Iyer, CEO of Access to Medicine Foundation in The Netherlands; Esther Passaris, a Member of Parliament of Nairobi City County in Kenya; Ong Ye Kung, Minister of Health of Singapore; and Thomas Östros, Vice-President of the European Investment Bank.

Sharing an African perspective, Esther Passaris spoke of the importance of health being accessible and affordable. “In Kenya we have prioritized universal health coverage as well as affordable housing, food security and job creation,” she said, adding, “We cannot just look at health without a holistic approach towards making sure that every citizen feels included and not left behind.”

The African Development Bank chief met with WHO Director-General Tedros Adhanom Ghereyesius and WHO Regional Director for Africa Dr. Matshidiso Moeti on the sidelines of the summit. Both organizations are to continue working closely to meet the need for Africa to bolster its health defense system.

Adesina assured Tedros that the African Development Bank would continue to shore up its investment in healthcare infrastructure and support manufacturing capacity for pharmaceuticals, including vaccines. He said tackling health was both a health issue and a multi-sectoral one, involving investments in agriculture, water and sanitation, and renewable energy infrastructure.

Standardizing primary healthcare in African countries will be a key area of cooperation.

The two organizations will also join forces to ensure that much of the knowledge of African health professionals in the diaspora is put to optimal use in developing needed health facilities and capacity building on the African continent.

Adesina also met with senior officials of tech giant Google, including the company’s Senior Director for Social Impact, Hema Budaraju, and its Government Affairs and Public Policy Director for Sub-Saharan Africa, Charles Murito. The African Development Bank and Google will explore ways to use innovative digital technology to advance healthcare systems in Africa, and to improve food and agricultural systems.

Source: AFDB