Assessing financing for healthcare infrastructure in Sub-Saharan Africa: can Islamic finance assist?

Healthcare systems in Sub Saharan Africa (SSA) have tethered on collapse during pandemic. Studies find healthcare facilities in SSA countries are significantly below what is required for maintaining healthy societies. This situation is worse when accounting for healthcare infrastructure targets to achieve the United Nations Sustainable Development Goal of good health and well-being. Healthcare needs for Ethiopia, the Democratic Republic of the Congo, Nigeria and Sudan are in urgent need of healthcare infrastructure development and enhancement. Unfortunately, World Bank data indicates that health expenditure to GDP in the SSA is the lowest in the world. Funding gaps of more than US$100 billion/year are supported through public funds, public-private partnerships (PPPs) and blended finance structures. However, research indicates that pandemic debt coupled with increasing debt to GDP ratios have resulted in rating downgrades for 18 countries within the SSA, making future debt even more expensive. Debt servicing costs through interest compounding also risks country sovereignty as national assets are at risk of foreclosure to wealthy nations like China. In addition, abandoned infrastructure or poorly managed projects in the SSA have been because of corruption and poor governance. We find that Islamic finance solutions provide significant advantages for the SSA because of their rigorous governance criteria, compliance requirements and circular system of benefit. We suggest that all models of Islamic finance cannot be replicated because of different economic status, technical expertise and cost of funding. Islamic Public-private-philanthropic partnerships (iPPPPs) seem best suited to the SSA, integrating Islamic social funding support. We also recommend that the performance measurement criteria be included in healthcare funding to improve the quality of healthcare delivery in the region. Therefore, Social Impact Sukuk and Cash Waqf Linked Sukuk (CWLS) both offer significant advantages that are also more applicable in lower income or developing economies than PPPs. We suggest that the Indonesian and Malaysian CWLS model be considered for replication. Funds may be mobilised by replicating crowdfunding options like myWakaf in Malaysia, supported by several Islamic banks through good governance and matching grants. Finally, we suggest that the African Development Bank consider establishing and Islamic blended asset fund that will protect SSA countries that are most in need in times of health crises. This requires global support, emphasising the Islamic principles of public solidarity, equity and justice instead of health (or vaccine) nationalism if the world truly wants to be safer and healthier.