Demand For Private Healthcare in Ghana: The Investment Opportunities as Middle Class Rises

The structure of the health system in Ghana consists of national, regional, district, sub-district and community health systems and is built on the Primary Health Care (PHC) System. Services are provided by many partners including the private health care services, the religious bodies’ health facilities, the parastatal health system and private clinics. Additionally, traditional herbal and spiritual centres provide services to many Ghanaians (MOH 2007).

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Regarding health delivery in Ghana, a research by Agyepong (1999) noted that, during the 1990s the Ghanaian health sector was decentralized. The 1996 Ghana Health Service and Teaching Hospital Act removed administrative and service delivery responsibilities from the Ministry of Health (MoH) and delegated them to an autonomous body known as the Ghana Health Service (GHS). The Ministry of Health (MoH) has retained responsibility for policy formulation.

The Christian Health Association of Ghana (CHAG) plays a complementary role to the public sector and is the second largest provider of health services in the country. It is estimated that approximately 42% of total health services in the country are provided by CHAG member institutions (Abdullah and Vanessa, 2009).

Problem Statement 

Ghana’s health system has been plagued by its ongoing battle with diseases which have to a large extent been eradicated on other continents, while also being burdened with a rise in lifestyle and chronic diseases.

In Ghana, the government of the day has a big challenge with providing basic clean water, sanitation and enough nutrition while the increasing demand for health services that serve the growing needs of its burgeoning middle class are straining the already overburdened health care system.

According to the World Health Organization (WHO), an estimated 3.2 million people contract malaria every year of which 20% are deaths of children under the age of five. Even if a child survives, the consequences from severe malaria such as convulsions or brain dysfunction can hamper long-term development and schooling. The annual economic burden of malaria is estimated at between 1% to 2% of the Gross Domestic Product in Ghana.

Two-thirds of the disease burden in Ghana is caused by communicable diseases. HIV/AIDS leads the causes of death, followed by lower respiratory infections, diarrhoeal diseases and malaria. Six percent of the population also accounts for the HIV/AIDS burden as noted by WHO in 2012. This high cases of communicable diseases play a part to statistics that confound global averages. High infant mortality; 64 infant deaths per 1000, and low life expectancy of an average of 60 years accounts for additional investments in Ghana’s health sector.

Ghana also has a particularly high rate of cardiovascular diseases, with 75% of adults suffering from hypertension, but only 4% having it under control. This demonstrates the lack of efficient health care services in Ghana, according to BMI Research.

However, within the last decade, Ghana, together with multinational partnerships, developmental agencies and non-governmental organizations (NGOs), are making conscious efforts to revamp health results, mainly through executions that would facilitate in achieving the Millennium Development Goals (MDGs). Notwithstanding this fact, the World Bank notes that, despite these efforts, not a single African country was expected to meet the health-related MDGs by the end of 2015.

The panacea to enhancing Ghana’s health outcomes therefore lies in reinforcing its systems. Ghana’s health systems is bedeviled with poor infrastructure, a shortage of skilled professionals and geographic and socioeconomic inequalities.

The accessibility of health service in Ghana is directly linked with the number of hospital beds available. Therefore if a patient is taken to an Emergency Room and all the beds are full that patient is asked to leave or is in most cases left unattended to no matter the level of acuteness the patient’s condition may be. According to the World Bank, the number of hospital beds is 10 per 10,000 in Africa; while in Europe its 63 per 10,000. This condition is quite severe in Ghana which stands at 0.9 per 1000 people.

Aside the fact that Ghana’s health system has been embattled with periodical strikes from health workers, majority of these health workers despite being trained professionals still lack the requisite skills to address the needs of patients, and this has acted as a barrier in the advancement of the country’s health care services. A survey by Ofosu-Kwarteng, 2012 at the Koforidua Regional Hospital states that out of a surveyed patients sample, 36% had reported a form of mistreatment experienced from health workers while 46.6% had a negative impression and were not satisfied with nurses’ human relations.

The diminishing health care quality is the major factor which has contributed to the reasons for the increasing numbers of Ghanaian elite and middle-class who leave the country to seek medical treatment in Germany, USA, Canada, Israel and South Africa. This also shows that most Ghanaians have lost trust in their public health care systems. The veracity of services required to care for Ghana’s ever growing population is on the rise and the large amount of health challenges in Ghana makes it inevitable at the extent to which private investments are required.

According to the Ministry of Health (2007), health care quality in Ghana has been compromised and is bedeviled with challenges such as; users routinely complaining of abusive and humiliating treatment by health providers, long waiting time, high cost of care and illegal charges are commonly cited as reasons for dissatisfaction with public sector services. The Ministry of Health report further states that, patients also have limited avenues to seek redress while the shortage of equipment, consumable supplies and some essential drugs have also undermine facility functioning, damaged reputation, inflated out-of-pocket costs to patients and fuels a spiral of distrust and alienation. In many health facilities across Ghana, standard managerial practices that also ensures the effective use of (limited) resources are mostly not universally practiced.

Human resources also poses a significant barrier to achieving health care on a large scale. Ghana’s patient to doctor ration is 0.096 to 1000, yet a large number of doctors are still leaving to Europe and USA since those countries can afford to offer them better benefits and pay them higher salaries.

Access to health care in Ghana is also characterized by the geographic dispersion of health worker population. The health sector in Ghana is in transition from a mainly government managed public sector to greater diversity of health services providers. The public sector faces many challenges in terms of financing and this has resulted in the diminishing quality of basic health services.

The National Health Insurance Scheme (NHIS) is a national service that finances the sector but it faces serious challenges for financial sustainability and efficiency. In response to the continuing demand and willingness from the middle class and elite to pay competitive fees for quality health services, the opportunities for international investors in the health sector will continue to emerge.

The Investment Opportunity

The private self-financing health sector employs 10% of Ghana’s health workforce, mostly in the urban areas. The private sector has a large number of health facilities, yet they appear to have a proportionately smaller number of staff than the public sector.

In the wake of increasing numbers of private health providers, the client base for hospital and medical equipment is expanding with more interesting parties in Ghana who value and are prepared to pay for good and prompt service. In the Eastern and Greater Accra regions of Ghana alone, private providers accounted for as much as 60 to 70 percent of total health services demand.

Private health facilities complement the public sector and as free health care in the public hospitals is not absolutely free, the costs are becoming increasing less of a barrier. The added values of private facilities are quality and convenience, the private sector is thus gaining popularity. There is a growing middle class in Ghana that prefers to use private health facilities and can afford it.

While up till now the international commercial interest was mainly confined to construction and supply of equipment with some after sales management support, it is likely that in the near future health services management will become the focus of commercial interest as demands keep surging.

By far, foreign investors have a big opportunity in Ghana’s health sector which could in turn lead to the discovery of a booming and untapped sector. As reported by the WHO, it is estimated that for every 10% increase in life expectancy at birth there is a corresponding rise in economic growth of 0.4% per year in sub-Saharan Africa.

Since the Abuja Declaration in 2001, African countries have pledged to devote at least 15% of their national budgets to health, however most countries have not met this target. In 2013, the Government of Ghana only spent only US$ 63 on each citizen’s health. The 2014 budget decreased this to US$ 42. Between 2009-2012, less than 30% of the approved government funds for health were actually received by the health sector.

Despite the existence of the National Health Insurance Scheme (NHIS), the burden of paying for health falls heavily on households since the government does not spend enough, 36% of all health spending in Ghana was out of the pocket spending which was spent by households up -front and without insurance in 2013 and this has more than doubled since 2011.

Achieving effective health care results is most often related to expenditure, however, public and donor financing for health care in Ghana hasn’t done enough to adequately support health care provision for Ghana’s increasing middle-class. The share of actual expenditure made by the Government of Ghana (GOG) after examination of the public accounts for 2013 showed that compensation of health services employees alone absorbed 44% of total health expenditure, with interest on debts absorbing 19.5%, and goods and services only 5.8%. Foreign financed investment (i.e. GOG spending in 2013 financed from donor project grants and overseas loans) also accounted for 24.8% of spending. This indicates that majority of government and donor financing for the country’s public health sector are used to pay salaries and debts.

This gap in health care investments provides an opportunity for private investors to meet Ghana’s health care needs. There are huge opportunities for private investors to engage in Ghana’s health care sector that can shore up public resources to meet health care demand. McKinsey & Company estimates that over the next decade, US$25-30 billion in new assets will be needed to meet the growing demand for health care in sub-Saharan Africa.

The largest opportunities currently in Ghana’s health sector exist in direct health care provision, including building physical assets, as a huge amount of new hospital beds are going to be in demand in the next ten years. This would also require investments into human resources (physicians, nurses etc) as well as pharmaceutical and medical supplies and the training of medical professionals. The construction of hospitals but also diagnostic centres and laboratory services are also examples.In 2011 Abraaj, which is a private equity investment firm, invested US$4.5 million into C&J Medicare, this enabled the hospital group to expand to a new facility in Accra, acquire over US$2 million in medical equipment, including new radiology equipment for MRI and CT scans, and recruit new clinical and managerial staff. The new facility expanded specialist care in psychiatric health, cancer screening and cardiology that was not previously available in the area.

Aside these direct demands, hospitals which offer research and specialist health care treatments are also vital investment options. Training of medical professionals or the setting up of hospitals which also serves as a training hospital in Ghana would help boost Ghana’s availability of doctors and help contribute to the output of medical doctors from only four medical schools in Ghana. The number of Cuban doctors imported into Ghana was said to have increased from 60 in 1990 to 200 a year in 2003. The demand for skilled medical practitioners could also be met with the setting up of a teaching hospital.

However, with an eye toward partnership and locally-driven due diligence, impact investment in health care offers promising opportunities for both financial reward and substantial social impact.

The Risks Involved
 Ineffective Regulatory Bodies And Health Associations
The Government of Ghana created the Private Health Sector Development Policy since 2013, and while many of the identified issues and proposed strategies are still relevant, the bulk of the agenda remains unimplemented.

Almost all private health professionals and provider groups in Ghana have formed professional association. However, these associations contribute little to monitoring and ensuring quality of care or to the development of their members’ business as well as their financial skills.

Though the Health Facilities and Regulatory Agency was set up by an act of Parliament in 2011 to license, regulate and provide standards for the setting up of private hospital facilities by private actors, there has been inadequate resources to conduct ongoing supervision and monitoring of private hospitals and facilities. Much of the agenda of the Private Health Sector Development Policy (PHSP) remains unimplemented six years after its adoption. Other than the significant agreement with the Christian Health Association of Ghana (CHAG), which mostly operate in rural parts of Ghana, there are no public-private partnerships of note. Little is known about the real effectiveness of the regulatory boards and councils. The activities and scope of services provided by the private associations are not documented. There is no systematic assessment of the role played by private actors.

Insufficient Health Data
There are also no available data on what health consumers perceive how they access or use private health services. The household or from the pocket spending on privately provided health services is also relatively unknown.

There is also a close to a non-existent availability of data about the type, extent, and severity of problems faced by private actors. It is largely unknown whether and to what extent taxes, regulation, input supplies, access to credit, and management skills in the private health sector has been effective. The ease to doing business in the overall health business environment is also relatively unknown.

Abdallah, S., and Vanessa, P., (2009) Health Care in Ghana, Austrian Centre for Country of Origin & Asylum Research and Documentation, Österreichisches Rotes Kreuz Wiedner Hauptstroβe 32 1040 wien. Pg 11-14

Agyepong, A., I., (1999) Reforming Health Service Delivery at district level in Ghana; the perspective of a district Medical Officer, Oxford University Press.

Chilongo, M., 2015, Investment theme: Access to health services, paper used for discussions at University of Cape Town, Graduate School of Business, Available at

Clarke, J., Tyson, S., Ghana health sector support programme: Scenario planning and risk management, 2014, Draft Report, Available at

Iddrisu, M., The Role of the Private Sector in Health Care Service Provision in Techiman Municipality, 2014.

Ministry of Health, Human Resources for Health Country Profile Ghana, 2011, MOH: Accra
Ministry of Health (2007) National Health Policy, Kwabena Adjepong & Francis Nunoo pg. 2-3.

Ofosu-Kwarteng, J., Healthcare delivery and customer satisfaction in Ghana: A case study of the Koforidua Regional Hospital, 2012, Available at

Population Reference Bureau, Infant Mortality Rate (infant deaths per 1,000 live births), 1970 and 2014, (2014), Available at
UNICEF, Ghana Fact Sheet Malaria, 2007. Ghana

World Bank, Hospital beds (per 1,000 people), 2017. Available at

Image Credit: CEO Africa


Isma-il Sulaiman and Bernard Boachie-Danquah are the Founding Partners of Goodman AMC, and are both renowned strategy consultants with extensive experience on the African market.

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