Blog
Catalyzing Health Financing in Africa
Isiuwa Onayiga, Manager English-Speaking West Africa
Jul 23, 2025

Sub-Saharan Africa’s (SSA) health systems are predominantly funded through three traditional sources: government allocations, private contributions (including out-of-pocket payments and private insurance) and donor aid. However, the disparity in per capita healthcare expenditure is striking. While Western countries typically spend over $2,000 per person, SSA nations like Nigeria, Kenya and Rwanda spend between $37 and $100 per capita. This underinvestment severely limits access to quality care and the ability to respond to public health challenges.

Countries like Tanzania and Malawi rely heavily on donor funding, while others like Nigeria and Ghana see a disproportionate burden on private spending. For instance, Nigeria’s health expenditure is 76% out-of-pocket, underscoring the financial strain on individuals and the need for systemic reform.

Innovation in Financing: Beyond the Traditional

To bridge the persistent health financing gap in Sub-Saharan Africa, there is a need for a comprehensive approach to innovative financing - leveraging non-traditional methods that mobilize domestic resources and enhance efficiency. These mechanisms fall into three key archetypes:

  1. Government Funding Schemes: These involve strategic fiscal policies such as tax earmarking and levies. Nigeria’s sugar tax, which imposes NGN 10 per litre on sweetened beverages, is a prime example of using excise duties to fund health-related initiatives. Similarly, Rwanda has increased taxes on tobacco and alcohol to support expanded health insurance coverage for non-communicable diseases (NCDs). Zimbabwe’s AIDS levy - a 3% tax on corporate and income earnings - has been instrumental in sustainably financing the country’s HIV/AIDS response
  2. Multi-sectoral Financing: This archetype focuses on pooling resources across public and private sectors. Mechanisms such as social and development impact bonds, public-private partnerships, and policies that attract private investment are central to this model. These approaches not only diversify funding sources but also foster shared accountability and innovation in service delivery.
  3. Community-based Fundraising: Grassroots-driven models like crowdfunding platforms, lottery awards, sales-linked donations and structured diaspora health funding, empower communities to contribute directly to health initiatives. These mechanisms tap into local solidarity and can be particularly effective in addressing specific, time-sensitive health challenges.

By embracing these diverse financing models, countries can reduce overreliance on out-of-pocket spending and donor aid, while building more resilient and equitable health systems.

What Makes Innovative Health Financing Work?

IQVIA identifies three critical success factors for initiating and scaling innovative financing:

  1. Political Will and Enabling Environment: Governments must prioritize health and create policies that support innovative financing.
  2. Transparency and Accountability: Stakeholders need confidence in how funds are used and the outcomes achieved.
  3. Partnerships and Implementation Capabilities: Collaborations with trusted local actors and a robust infrastructure are essential.

The Role of Data: A Unifying Force

IQVIA sees better data as a common denominator to achieve these critical success factors. Here are just three examples:

From registries and claims data to electronic medical records and consumption data, there is a need for well-curated, interoperable data systems that can foster and scale innovative financing mechanisms.

Reach to our experts to discuss how IQVIA can help you in this journey towards building more resilient and equitable health systems.

Contact Us