OBG talks to James Macharia, Cabinet Secretary, Ministry of Health

Interview: James Macharia

What opportunities exist for private investors in health care, and what role will public-private partnerships (PPPs) play in this regard?

JAMES MACHARIA: In the region, Kenya is the biggest market for health care. We purchase $700m of drugs annually, of which 70% are imported. There are significant opportunities for pharmaceutical companies to come into this country and set up factories for anti-retroviral or malaria drugs, which for us are essential medicines. We have a big problem with diseases that are non-communicable, in particular cancer, renal diseases and cardiovascular disease. All of these are currently being treated abroad. Every year, 10,000 Kenyans leave the country for treatment, which costs us KSh10bn ($114m). If you have investors coming in and implementing the same technologies as in South Africa and India, the majority of people will stop leaving for treatment in those countries and start being treated here. Then, because Kenya is a regional hub, you will find that people from neighbouring countries, like the Democratic Republic of Congo, Rwanda and Tanzania, will start coming here too. Based on this vision, we see our health industry as a potential billion-dollar business.

Finance is a major challenge for the sector, with the health budget accounting for only 7% of government spending. There are many constraints to raising this figure, so it is essential we work closely with the private sector to bridge this gap. Following the passage of the PPP law, a number of private entities can now work with the government. For example, we are introducing modern equipment to all our hospitals. The intensive care unit and general diagnostic equipment we need would normally cost us $500m, but private companies have been able to bring in much of this equipment instead.

Which measures are being taken to develop the skills of workers within the health sector?

MACHARIA: We need to increase the number of students going through training programmes. There is currently a shortage of around 42,000 nurses and 20,000 doctors in Kenya. Our plan is to put together a programme that will train 12,000 nurses every year. We must work closely with both public and private universities to achieve this goal. Additional private medical facilities will play a part in absorbing the graduates of these programmes. Another challenge is that jobs in the medical profession currently do not offer competitive wages. Even though doctors today are paid five times what they used to earn, this is still far below international standards. Many of the best doctors in the UK come from Kenya, so with better employment prospects here, these doctors will have a reason to come back.

What has been the impact of the devolution of health services from the central government?

MACHARIA: Health is the most devolved of all the ministries. Recently, 70,000 civil servants were transferred to the counties, with over 60% of those being health workers. The most challenging aspect of this process has been educating these workers and reassuring them that standards and their work environment will not change. The strikes in 2013 were not due to changes in salary or terms of employment, but rather due to the change in employer, from the national government to county governments. We also need to work with the counties and governors to reassure them that they hold a critical role in the country, and to ensure that they operate as such. If the health system collapses at the county level, the national government is very much affected. That is why in the health ministry we are holding a number of forums to make sure that all procedures are standardised across the country.

One issue is that the counties do not usually have sufficiently large economies to attract the largest international investors. Big companies like GE, Philips and Siemens tend not to approach the counties because these companies are looking at $500m deals as opposed to the $20m deals that are available at county level. With that in mind, we have a responsibility at the national level to ensure that investment reaches the counties.