The government of Kenya is has developed the Health Sector PPPs Strategy. The Strategy provides a number of investment opportunities in health service provision involving a private sector partner having management control of public hospital in order to get return on investment at rate that does not hamper access.
Other PPPs -related investment opportunities are telemedicine; referral or sharing of medical resources; local manufacture of generic drugs, adjusting products to meet unmet demand; creating new model for mobile; remote and home based health care; and creating new opportunities around rapid penetration of mobile phone
1. Make Kenya a regional health services hub
The Vision 2030 recognizes role of private sector in improving the delivery of health care in partnership with the public sector. With support of private sector, Kenya intends to become the regional provider of choice for highly-specialized health care, thus opening Kenya to ‘health tourism’. The term health tourism includes spa and gym, naturopathy, yoga, meditation and many other mental and physical exercises and treatments that are beneficial for health and rejuvenation. Kenya has plenty of geothermal mineral water springs (in Rift Valley province and parts of Western province) whose mineral contents have the potential for the development
of health spas to serve as curative centers as well as tourist attractions. The most significant hot water springs are found in the following places: around lakes Bogoria and Baringo. The two lakes are 345 Km from Nairobi and are within National Game Parks; around Lake Turkana which sits at the borders of Kenya, Ethiopia and Sudan; Olkaria and Eburu near Lake Nakuru which is famous for flamingos; and Simbi on the shores of Lake Victoria. The area is close to Maasai Mara Game Reserve renowned for its wildlife. Beside health tourism, there is medical tourism. Medical tourists are broadly defined as people who seek quality treatment abroad, or in a neighboring state where the cost is significantly lower, leaving them with enough money to tour the host country as part of their recuperation. Kenya is steadily catching up with development of new medical facilities; a local private hospital is already pioneering medical tourism in Kenya and has upgraded infrastructure and equipment, and is now able to perform, at a fraction of the cost, many procedures that previously could only be done in South Africa, the West or India.
2. Pharmaceutical and medical equipment manufacturing
The Kenyan pharmaceutical market is booming as a result of a growing population that is increasingly able to pay for better health services and pharmaceutical products. The health sector has experienced remarkable development in recent years with the country spending about 7% of the GDP on health. The rapid growth of the pharmaceutical market in the region has presented the need to increase quantity of production, and also increase the export ratio for quality products. More prospective opportunities lie in the expansion of product portfolio, search for new markets, and support for medical research. The rapid growth of the pharmaceutical market in the region has presented the need to increase quantity of production, and also increase the export ratio for quality products. Kenya is currently the largest producer of pharmaceutical products in the Common Market for Eastern and Southern Africa region, supplying about 50% of the region’s market. Out of the region’s estimated 50 recognized pharmaceutical manufacturers, 30 are based in Kenya. The industry has a strong multinational heritage, with many foreign firms maintaining significant operations.
3. Health services provision
The private sector’s complements the government in improving access to health care. There are 6,190 health facilities in Kenya, 48% of these facilities are manned by government while 34% by private enterprises. In essence, the country has the largest private health care segment in the region and holds significant potential for financial returns. Opportunities can be found in inpatient and outpatient care, preventative care and diagnostic services. High end clinics that target growing middle and upper-income groups are especially profitable and provide high quality care that attracts patients as well as experienced staff. High volume, low cost hospitals usually located in high density areas targeting low income earners also offer high returns.
Private hospitals can achieve local accreditation as training institutions for nurses, midwives and laboratory technicians; and large multidiscipline universities.
4.Market incentives for investment in health care
The country recognizes that collaboration and partnership between the public and private sector in health is an important guiding principle in the delivery of health services. Market incentives for private sector investment in health care in Kenya include: range of tax incentives, stable pro-investment government; business friendly reforms; large pool of skilled enterprising workers; strategic location as a financial, communication and transport hub; improved physical infrastructure; well established legal and regulatory framework; low cost of internet connectivity an undersea and terrestrial fiber optic cable infrastructure connecting Kenya to the world wide network, no foreign exchange controls; and capital repatriation, remittance of dividends, and interests are guaranteed to foreign investors.
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