Investors target Nigeria’s $1bn medical tourism market

Investors are targeting Nigeria’s estimated $1 billion medical tourism market as two major investors plan a US$500 million investment on two new 500-bed hospital projects to be located in Lagos state.

Dubai-based emerging market investment fund, Abraaj Group and AXA Mansard Insurance Plc are planning hospital projects that “will reduce the need to fly abroad for medical treatment,” says Doyin Odubanjo, a public health expert.
Abraaj is billed to spend up to $500 million in start-up capital for a mid-tier hospital business, tapping into demand from the continent’s emerging middle class.
Sev Vettivetpillai, a partner at Abraaj, said the group was well on the way to securing land for a 350-bed multi-speciality hospital in Lagos, Nigeria’s commercial capital, as well as buying several hospitals in Nairobi, Kenya, to form a healthcare ‘cluster.’
“We’re looking to build from the ground up because the assets do not exist,” Vettivetpillai told Reuters on the side-line of the World Economic Forum on Africa in Rwanda, recently.
Vettivetpillai further said that, besides its own cash, Abraaj was looking to attract a similar sums from other investors, meaning that the first four target cities were likely to absorb at least $1 billion between them in the next five years, he said.
Similarly, AXA Mansard Insurance Plc, is poised to secure funding for a 150 bed hospital and two clinics; one within the mainland and the other on Lagos Island, serving as feeders, from its partners, the International Finance Corporation (IFC) and Africa Capital Alliance (ACA).
The proposed IFC financing is a US$8.2m equity investment for a 20 percent equity stake, to support the green-field development, construction and operation of the hospital. Also, Africa Capital Alliance (ACA), a private equity fund is considering investing in the project for a 40 percent stake.
The hospital will be built on a 20,000 square meter parcel of land purchased by AXA Mansard in Ikate Elegushi, Lekki, along the Lagos/Epe Expressway, Lagos State. The land was a portion of Bela Vista Estate, which is classified as commercial land. The clinics will be designed and built on either procured land or from existing buildings, which will be demolished.
The project sponsor has also partnered with Healthshare Health Solutions Ltd, a South African hospital operator with international hospital development and management experience to manage and operate the hospital.
In addition to Healthshare’s management role, Healthshare’s parent company, EOH Holding Ltd will invest equity for a five percent stake in the company. EOH Holding Ltd is a major South African business and technology solution provider.

 

 

ISAAC ANYAOGU & ANTHONIA OBOKOH