At the health policy dialogue organised by PharmAccess Foundation and Nigeria Health Watch on the 11th April 2019, Olufisayo Okunsanya discussed financing healthcare projects.

1. Context – What Drives The Lending System
• A firm belief in the
reliability, truth, or ability
of someone or something
• Whenever there is a
breakdown in trust
between key stakeholders,
lending cannot occur
• Trust is capital
TRUST: /trʌst/

2. Context – Trust and Lending
David Smick Described the global economy as a
paranoid benefactor with trust issues
Global Savings is
available to fund every
idea. However, there are
conditions…

3. 3
Financing
Healthcare
Transactions
Presentation by
Olufisayo Okunsanya
Business Development
Director,
Medical Credit Fund

4. Analysis of the Budget of the Federal Ministry of Health
RECURRENT EXPENDITURE
₦316 BILLION
TOTAL FMOH BUDGET
₦366.1 BILLION
CAPITAL EXPENDITURE
₦50.1 BILLION
₦50 bn for healthcare is
clearly not able to cover the
infrastructure gap in the
industry and so FGN will
clearly rely on Public
Private Partnerships going
forward.
Outlook – 2019 and beyond

5. Why we Must All Embrace Public-Private Partnerships
• In spite of the infrastructural gaps in the healthcare sector in Nigeria, the Federal Government is allocating only about
3.95% of its budget on healthcare in 2018.
• Health spend per capita is also quite low, with Nigeria ranking lower than many African countries.
Healthcare expenditure Per Capita in $PPP across Selected Economies
1,000
800
600
400
200
0
2011 2012 2013 2014 2015 2016
World Algeria Angola Nigeria South Africa Thailand
Source: Business Monitor International 2016

6. Nigeria: Budget Performance in 2018
Budget Performance – Q3:
• Revenue – 53%
• Expenditure – 67%
• Debt Service & Non-Debt
Recurrent Expenditure on
track
• This means that CAPEX
took the hit at 38%
performance
S/N Description FY Budget Actual (Q3)
1. GDP Growth Rate 3.5% 1.81%
2. Oil Production
(mbpd)
2.3mln 1.95mln
3. Oil Price US$51 US$74+
4. Inflation Rate 12.4% 11.28%
5. Exchange Rate (CBN) 305 305.95
6. Revenue (₦’trillion) 7.16 (Prorata
– 5.38)
2.84
7. Expenditure
(₦’trillion)
9.12 (Prorata
– 6.84)
4.59
Source: Proshare Nigeria

7. Support for PPPs at the Highest Level
The Buhari Administration will tackle corruption in all sectors of the economy and establish a
sufficient tax culture. The Administration will encourage Public-Private Partnerships ensuring a
transparent framework that reduces the bottlenecks in doing business
Excerpts of speech of His Excellency
Vice President Yemi Osinbajo AT 10th
Year Anniversary Lecture of Crescent
University, Abeokuta, Ogun State June
11, 2016
Excerpts from the speech of President
Muhammadu Buhari on August 23,
2015
We also have a huge infrastructure deficit for which we require foreign capital and expertise to
supplement whatever resources we can marshal at home. In essence, we seek public private
partnerships in our quest for enhanced capital and expertise.

8. Conditions that Define PPPs
ARRANGEMENT
Between Public and Private
Partners
PROVISION
Of service for public benefit,
by private sector
INVESTMENT
In and/or management of
public asset by private sector
TIME PERIOD
For a clearly defined tenor
RISK SHARING
Optimally between
contracting parties
PAYMENT
Linked to performance
STANDARDS
Focus on standards of service
and performance

9. What We Look For in Sustainable PPPs
Contract
Funding
Market
Capacity
Impact
Sufficient Patient Flow Robust Contracts
Proper Funding Mix
Proper Social Impact
and Health Outcomes
Strong & Efficient
Operations

10. PPP Waterfall
• Income: The PPP contract must define the mode
of collection of the income and specify the
account in which the income from operations will
be paid
• OPEX: following the payment of taxes on revenue,
the PPP must first cover the cost of operating
expense, i.e. staff salaries and payments to
suppliers to ensure sustainability of the project
• The next area to be covered is debt service. The
PPP must be able to pay back its loans
• Following the satisfaction of all other
stakeholders, profits and dividends can be share
between the partners
01
INCOME
02
OPEX
03
DEBT SERVICE
04
PROFITS AND DIVIDENDS
₦
₦
₦
₦

11. Performance Capacity Governance MarketHealth
Assessed by looking at
your balance sheet. Is the
business doing well?
Assessed by looking at the
Cash Flow Projections. Will
the Business do well going
forward?
Is there expertise to run
the business successfully?
Is the governance strong
enough to check the
excesses of the business
promoter?
Does the market exist to
support the business?
Parameters for Assessing PPP Partners

12. Stakeholders in Financing a PPP Healthcare Transaction
Equipment Suppliers
Design & Construction
Team
Legal Team
Finance Partners
Healthcare ProvidersTechnical Support Team
05
06 01
02
0304
Government:
The Conceding
Authority

13. Stronger Together – Group Practice
Now this is the Law of the Jungle, as old
and as true as the sky;
And the Wolf that shall keep it may
prosper, but the Wolf that shall break it
must die.
For the strength of the Pack is the Wolf
and the strength of the Wolf is the Pack

14. Preparing a Healthcare Business for PPP Transactions & Financing
PHASE01
PHASE2
PHASE3
PHASE4
Build
Capacity
Find the
Right
Partners
Build
Systems
Keep
Clean
Records
Confront
Reality
PHASE5