Dwindling Development Assistance by OECD for Healthcare: Africa could Tap Indian Partnership
The US administration, in early 2025, initiated freezing of foreign development assistance financing. The other donors of the
OECD Development Assistance Committee
(DAC) are also reducing aid commitments and increasingly channelling their economic assistance bilaterally through issue-specific earmarked funds.
The leading DAC donors are reported to be slashing their aid budgets from 25 to 40 per cent by 2027.
Development financing channeled bilaterally or multilaterally by the donor countries for long-term development or short-term humanitarian purposes include ODAs in the form of grants, interest free or low-interest loans - referred to as 'aid', technical assistance, other debt instruments, and in-kind support, for development in other countries. The beneficiaries of such ODAs have been traditionally the developing countries in the Global South.
Foreign aid has played a critical role in addressing challenges in development of vital infrastructure and public services in resource constrained countries, one of the predominant areas being
Healthcare
.
At the same time, there is a growing consensus among the aid recipient countries that foreign aid is an inadequate driver for growth in development sectors due to its inherent nature of being unpredictable and unsustainable.
Recent years have seen the rise of South-South cooperation with increasing private sector involvement in this space. China, Japan, Turkey and
India
have emerged as significant development partners in Sub-Saharan
Africa
, South and East Asia.
Diminishing aid-environment has raised concern in the aid recipient countries, especially in Africa, about looming uncertainties in resource availability affecting progress in healthcare.
Despite significant progress in addressing mortality rate, mother and child health and tackling communicable diseases, lack of adequate healthcare infrastructure including workforce, rising healthcare costs, shrinking healthcare budgets of the Governments and their inability to achieve universal health coverage, continues to plague the African Healthcare.
According to the WHO and a recent AfDB report, Africa currently has 1.3 hospital beds per 1000 people (compared to 6.1 in Europe), and only one intensive care bed for every 100,000 people (compared to seven in India).
Africa has on an average 1.55 healthcare workers (including physicians, nurses and midwives) to 1000 people, with only four countries equating the global average of 4.45 per 1000 people.
This gap is wider with diagnostic capacity, with only 0.7 Magnetic Resonance Imaging (MRI) scanners for every 1,000,000 of its population (compared to 4.8 in China and 37 in the USA), demonstrating limited diagnostics capabilities and lack of medical technicians.
Africa is today faced with dual challenges in healthcare both with communicable diseases, such as malaria, HIV, Ebola and other parasitic outbreaks, and with economic progress, rising non-communicable diseases (
NCD
), such as diabetes, hypertensive heart diseases etc.
This calls for urgency in adapting healthcare infrastructure and services, accordingly. Experts tracking the global developments on intensified geopolitical competition and dwindling aid from traditional multilaterals, sees non-traditional partner, China as the front runner in filling the void by expanding its 'Health Silk Road' under its signature
Belt
and Road Initiative (BRI), which gained momentum during Covid 19 pandemic and remained mostly confined to partnering with the national healthcare capacities.
Countries in the African region views development cooperation, as not just providing financial resources but delivering value and technical expertise and working collaboratively with the governments and the civil society. India has an advantage here in unlocking its potential as a collaborative healthcare provider to Africa.
India has been steadily strengthening its development partnership in the African region since the mid-2000s, blending development instruments and active private sector participation.
Historically, India has been the affordable pharmacy to Africa, and health has figured prominently in the India-Africa partnership through several initiatives, such as the Pan-Africa e-Network Project (PANeP) facilitating telemedicine; announcement of an India-Africa Health Fund in 2015; the Indian Council of Medical Research (ICMR) collaboration with the African Union (AU) under the India-Africa Health Sciences Collaborative Platform (IAHSP); and medical tourism in India.
India under its Lines of Credit (LOC), providing concessional loans for development projects, have the largest number of credit lines extended to Africa. However, utilisation of these LOCs for Healthcare accounts for only around 1.28 per cent.
With Indian healthcare companies increasingly venturing in the African region, with interests in healthcare services, including innovative financing strategy to provide low-cost treatment, fostering an Africa-India health cooperation under a Public-Private Partnership (PPP) model can be path breaking in the India-Africa relation, also strengthening India's position as a development partner in healthcare for the Global South.
Manoeuvring this cooperation, Africa can explore leveraging the LOC mechanism for funding healthcare infrastructure in Africa, both in primary and tertiary care, undertaking PPP route wherein,
African Governments
could engage with Indian healthcare companies in delivering healthcare services and developing diagnostic infrastructure, besides developing policy and regulatory framework in healthcare delivery.
The mechanism can also be leveraged for refurbishing existing public and private healthcare infrastructures in Africa. Seeking funds for developing hard infrastructure under the LOC can mitigate the risk in implementing cross border PPP. Further, the cooperation may also facilitate medical goods and services imports by Africa from India. African patients account for around 20 per cent of travel under medical tourism in India and is the largest.
Travel for health has limitations of equity of access, as it privileges mostly the high-net-worth Africans. This is further challenged by post recovery follow ups, which is often undertaken through emails and telemedical consultations and identified as a major reason for treatment failure. The cooperation while may continue to give an impetus to medical tourism in India from Africa for tertiary care but also ease post recovery challenges back in Africa.
The article is written by Ms.
Sumana Sarkar
and Mr.
David Sinate
(Economists with India Exim Bank)
(DISCLAIMER: The views expressed are solely of the author and ETHealthworld.com does not necessarily subscribe to it. ETHealthworld.com shall not be responsible for any damage caused to any person/organisation directly or indirectly)
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