Private Healthcare Facilities
Private Healthcare Facilities
Business Model Description
Provide and operate private hospitals and clinics to offer affordable and quality care for underserved populations.
Expected Impact
Improve access to quality and affordable healthcare in semi-urban and rural communities.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Djibouti: Ali Sabieh
- Djibouti: Arta
- Djibouti: Dikhil
- Djibouti: Obock
Sector Classification
Health Care
Development need
Although Djibouti has recorded increasing life expectancy levels, reaching 62.5 in 2016 (1), the sector is burdened by lack of capacity with infrastructure concentrated in the capital (3). The country also has the highest infant mortality rate in Sub-Saharan Africa, standing at 48.4 per 1,000 live births in 2019 (4).
Policy priority
Djibouti aims to achieve universal health coverage, and provide care for vulnerable people in inner regions as outlined in Vision 2035 (2). The Government seeks to achieve a results-based management for healthcare and has allocated 6.73% of its budget to the Ministry of Health (1).
Gender inequalities and marginalization issues
Maternal and children's healthcare is limited in the country, with the average maternal hospital beds per 1,000 women standing at 3.22 (1). Rural populations also face difficulties in accessing healthcare services (3).
Investment opportunities introduction
The healthcare sector has attracted considerable international interest from Turkey and China. The Government allocated a significant portion of resources to healthcare provision and USD 30 million to three sectors including healthcare. There are numerous development partners supporting Djibouti's healthcare sector.
Key bottlenecks introduction
Key challenges in Djibouti's healthcare include rising population and increasing demand for services, especially in rural areas, the outbreak of COVID-19, and the influx of refugees pressuring existing infrastructure.
Health Care Providers
Development need
The existing healthcare facilities in Djibouti offer limited operations and there are only 1.4 hospital beds available per 1,000 people in 2017 (13), with the rate falling to 3.22 maternal hospital beds per 1,000 pregnant women (1). Healthcare provision is severely constrained in rural regions marked by limited access to facilities and constrained service offerings (3).
Policy priority
Vision 2035 highlights the Government's ambition to offer universal healthcare services (2). The 2018-2022 National Health Development Plan allocated an operating budget comprising 6.73% of total Government expenditure for sickness prevention campaigns and strengthening information management (1).
Gender inequalities and marginalization issues
Remote areas are severely affected by lack of accessibility to healthcare services, which increases the rate of non-communicable diseases (NDCs) in such areas (3). Maternal and children's healthcare is limited with a high infant mortality rate (4).
Investment opportunities introduction
Opportunities in the healthcare provider subsector include high rates of healthcare expenditures amounting to 2.32% of GDP (5), significant interest from development partners and foreign investment originating from Turkey and China, and existing examples of healthcare clinics concentrated in the capital.
Key bottlenecks introduction
The existing healthcare infrastructure is concentrated in the capital with limited accessibility to services in remote regions. There is also an over-dependency on foreign aid for healthcare provision.
Health Care Delivery
Pipeline Opportunity
Private Healthcare Facilities
Provide and operate private hospitals and clinics to offer affordable and quality care for underserved populations.
Business Case
Market Size and Environment
USD 50 million - USD 100 million
Total health expenditure in Djibouti amounted to 2.32% of the country's GDP in 2018, which is equal to around USD 70 million (8).
Domestic private health expenditure by non-public sources, including households, corporations and non-profits, constituted 30.6% of the health expenditure in Djibouti in 2018, which is around USD 21.4 million (9).
Indicative Return
15% - 20%
Based on benchmark projects from Sub-Saharan Africa, private healthcare facilities in Djibouti can expected an IRR of 10-15%; urban clinics are expected to be more profitable than rural ones (10).
Investment Timeframe
Medium Term (5–10 years)
Private healthcare facility models operating under blended financing models, which include reimbursing establishment capital expenses, have investment timeframes of under five years. Fully self-funded models expect longer payback periods, ranging between 5-15 years (10).
Ticket Size
< USD 500,000
Market Risks & Scale Obstacles
Capital - Requires Subsidy
Business - Supply Chain Constraints
Market - Volatile
Impact Case
Sustainable Development Need
Djibouti faces a severe constraint in healthcare resources with only 1.4 hospital beds available per 1,000 people. Only two doctors are available to attend to 10,000 residents in the country (12) (13).
Nurses and midwives stand at 0.7% per 1,000 residents in Djibouti (14), and specialist surgical workforces per 100,000 residents are at 4% (15), which shows a lack of both general and specialised care capacity in Djibouti.
The lack of resources has resulted in severe health consequences in Djibouti, including a low average life expectancy rate of 67 years (16), an infant mortality rate of 48.4% per 1,000 live births (17), and high rates of HIV/AIDS and tuberculosis among the population.
Gender & Marginalisation
Quality healthcare services on Djibouti are concentrated in the capital, Djibouti City, where 51% of the health workforce is (12).
Maternal and children's healthcare is limited in the country, with the average maternal hospital beds per 1,000 women standing at 3.22 (11).
Expected Development Outcome
Private healthcare facilities improve access to affordable and quality healthcare services particularly, for underserved regions.
The additional, privately run, facilities alleviate pressure on the public healthcare system by absorbing patients that would otherwise seek public services or remain unattended.
Private healthcare facilities increase job opportunities in the healthcare market in the currently underserved regions outside of Djibouti City, which contributies to the communities' economic development.
Gender & Marginalisation
Private healthcare facilities increase access to medical services for women and youth through maternal and children's healthcare.
The additional facilities increase the provision of healthcare services for remote regions and marginalized communities, including the increasing refugee population, who lack access to comprehensive care.
Primary SDGs addressed
3.c.1 Health worker density and distribution
3.8.1 Coverage of essential health services
3.8.2 Proportion of population with large household expenditures on health as a share of total household expenditure or income
Dentists: 0.211; Nurses: 7.288; Pharmacists: 2.337; Physicians: 2.237 (per 10,000 people, 2014) (18).
47% (2017) (19).
Current health expenditure stands at 2.324% of GDP (8).
N/A
100% (globally) (19).
N/A
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Indirectly impacted stakeholders
People
Corporates
Public sector
Outcome Risks
If concentrated in urban areas, private healthcare facilities may reinforce the urban-rural divide in medical service provision.
Private healthcare provision may redirect resources and personnel away from areas covered by public health insurance schemes and national health capacity.
Impact Risks
If the private healthcare facilities are not affordable for low income communities, the expected impact may be limited as they would serve the same population groups already enjoying healthcare coverage.
Accessability challenges in rural areas cost efficiency considerations may lead to a concentration of private healthcare facilities in urban settings, which would limit the expected impact of targetting rural and marignalised communities lacking access to healthcare services.
Impact Classification
What
Private healthcare facilities improve access to quality and affordable healthcare in semi-urban and rural communities.
Risk
While the model of private healthcare facilities is proven, affordability questions for those underserved and competitive dynamics with existing public healthcare system require considerations.
Impact Thesis
Improve access to quality and affordable healthcare in semi-urban and rural communities.
Enabling Environment
Policy Environment
Djibouti Vision 2035, 2014: Committs the Government to improving healthcare access in the country's inner regions, providing care to vulnerable populations and through global partnerships A focus lies on investments in human capital through education and healthcare (11).
Plan National de Développement Sanitaire 2018-2022, 2018: Highlights quality care and accessibility, disease and sickness prevention campaigns, and governance and information management as priorities. The strategy will be implemented by the Ministry of Health with 6.73% of Government budget (11).
Strategy for Accelerated Growth and Employment Promotion (SCAPE) 2015-2019, 2014: Constitutes the instruments for guiding Djibouti's economic growth and development. It aims to achieve sustained and inclusive growth while promoting employment (20), including with regards to healthcare provision.
Regional Development Plans 2016-2020, 2016: Identified by the SCAPE as the primary vehicles for operationalizing Vision 2035 Djibouti (20), including with regards to healthcare provision, which is of critical relevance in Djibouti's regions.
Financial Environment
Financial incentives: The National Health Development Plan 2018-2022 allocates an operating budget comprising 6.73% of Government expenditures to the Ministry of Health to provide quality and accessible care (11), which is guided by the Djibouti Vision 2035 that seeks to engage the private sector.
Fiscal incentives: Companies that contribute to the economic and social development of Djibouti, as well as job creation, inclluding healthcare providers, are exempted from different types of taxation, such as the Home Tax of Consumption and Import Taxes as defined in the Investment Code (22).
Other incentives: The World Bank supports Djibouti's health system through the Improving Health Sector Performance Project, which recently approved USD 6 million additional financing targeting the subsector (21).
Regulatory Environment
Law No. 48, 1999: Sets out the policy orientation of the Ministry of Health as providing the nation with public health services accessible to all citizens, regardless of their social and geographic background (20).
Law No. 99, 2010: Establishes the National Institute of Public Health of Djibouti (INSPD) as a scientific entity with administrative and financial autonomy, attached to the Ministry of Health (20).
Law No. 174, 2007: Puts in place protective measures adapted to the situation of people affected by HIV/AIDS, including prevention, treatment, reducing its impact and controlling its spread (20).
Decree No. 0155, 2007: Introduces the Health Card and reorganizes the operations of the healthsystem, based on the principles of equity, justice and solidarity, while taking into account the country's international commitments (20).
Marketplace Participants
Private Sector
Som Clinique, Clinique Affi, FK Medical, The Adventist Health Center.
Government
Ministry of Health; Ministry of Agriculture, Livestock and Fisheries; University of Djibouti; public hospitals including Hopital Bouffard, Hopital General Peltier, Hopital de Balbala, Maternity Hospital Dar-El-Hanan and Districts Sanitaires Regionaux.
Multilaterals
World Bank (WB), World Health Organization (AfDB), UN High Commissioner of Refugees (UNHCR), International Organization for Migration (IOM), European Union (EU).
Non-Profit
Turkish Cooperation and Coordination Agency, Germany’s Federal Ministry for Economic Cooperation and Development.
Target Locations
Djibouti: Ali Sabieh
Djibouti: Arta
Djibouti: Dikhil
Djibouti: Obock
References
- (1) Oxford Business Group. 2018. Addressing challenges and facilitating universal health care in Djibouti's urban and rural areas. https://oxfordbusinessgroup.com/overview/renewed-focus-addressing-challenges-and-facilitating-universal-coverage.
- (2) Republic of Djibouti. 2014. Vision Djibouti 2035. http://ccd.dj/w2017/wp-content/uploads/2016/01/Vision-Nationale.pdf.
- (3) The Borgen Project. 2021. Fighting for Better Healthcare in Djibouti. https://borgenproject.org/tag/healthcare-in-djibouti.
- (4) The World Bank. 2019. Mortality rate, infant (per 1,000 live births) - Djibouti. https://data.worldbank.org/indicator/SP.DYN.IMRT.IN?locations=DJ.
- (5) Rebublic of Djibouti. 2018. Le Président de la République inaugure un nouvel centre médical privé.
- (6) Clinique Affi. Affi Clinic: Efficiency & Quality of Care. 2021. https://clinique-affi.com/en/presentation.
- (7) FK Medical. 2021. https://fkmedical.co.
- (8) World Bank, 2018. Current Health Expenditure (% of GDP) - Djibouti. https://data.worldbank.org/indicator/SH.XPD.CHEX.GD.ZS?locations=DJ.
- (9) World Bank. 2018. Domestic private health expenditure (% of current health expenditure)- Djibouti. https://data.worldbank.org/indicator/SH.XPD.PVTD.CH.ZS?locations=DJ.
- (10) GreenCape. 2020. GreenCape green finance database. https://www.greencape.co.za/content/focusarea/green-finance-databases.
- (11) Oxford Business Group. 2018. Addressing challenges and facilitating universal health care in Djibouti's urban and rural areas. https://oxfordbusinessgroup.com/overview/renewed-focus-addressing-challenges-and-facilitating-universal-coverage.
- (12) World Health Organization. 2020. Health Workforce Snapshot Djibouti. https://rho.emro.who.int/sites/default/files/Profiles-briefs-files/Djibouti_snapshot_2020.pdf.
- (13) World Bank. 2017. Hospital beds (per 1,000 people) Djibouti. https://data.worldbank.org/indicator/SH.MED.BEDS.ZS?end=2017&locations=DJ&start=2017&view=bar.
- (14) World Bank Group. 2014. Nurses and midwives (per 1,000 people) - Djibouti. https://data.worldbank.org/indicator/SH.MED.NUMW.P3?end=2014&locations=DJ&start=2014&view=bar.
- (15) World Bank. 2013. Specialist surgical workforce (per 100,000 population) - Djibouti. https://data.worldbank.org/indicator/SH.MED.SAOP.P5?end=2017&locations=DJ&start=2017&view=bar.
- (16) World Bank, 2019. Life expectancy at birth, total (years) - Djibouti. https://data.worldbank.org/indicator/SP.DYN.LE00.IN?locations=DJ.
- (17) World Bank. 2019. Mortality rate, infant (per 1,000 live births) - Djibouti. https://data.worldbank.org/indicator/SP.DYN.IMRT.IN?locations=DJ.
- (18) UN Global SDG Database. 2021. SDG Indicators. https://unstats.un.org/sdgs/indicators/database.
- (19) Sustainable Development Report. 2021. Country Profiles: Djibouti. https://dashboards.sdgindex.org/profiles/djibouti.
- (20) Republic of Djibouti, Ministry of Health. 2019. Projet d’Amélioration de la Performance du Secteur de la Santé (PAPSS). https://sante.gouv.dj/storage/publications/April2020/VJBsn1pg6a5VQmpI7wGR.pdf.
- (21) World Bank. May 2019. Djibouti: World Bank Approves $6 Million to Ensure Refugees and Host Communities Access Healthcare Services. https://www.worldbank.org/en/news/press-release/2019/04/26/djibouti-world-bank-approves-6-million-to-ensure-refugees-and-host-communities-access-healthcare-services.
- (22) International Labor Organization. 2020. An assessment of labour migration and mobility governance in the IGAD region: Country report for Djibouti. https://www.ilo.org/wcmsp5/groups/public/---africa/---ro-abidjan/---sro-addis_ababa/documents/publication/wcms_743309.pdf.
- (23) World Health Organization. 2020. Health Workforce Snapshot Djibouti. https://rho.emro.who.int/sites/default/files/Profiles-briefs-files/Djibouti_snapshot_2020.pdf.