Using Public-Private Partnership to Finance National Hospitals: The Case of Lesotho

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Many African countries are facing increasing demands for health financing with fewer limited resources available and dwindling donor financing. This disconnect compels African countries to come up with innovating financing mechanisms to achieve Millennium Development Goals.

Lesotho just like most African countries is facing the same challenges. The need for hospitals to serve the population’s need has not been matched with adequate financing from the government on this sector. This led the Lesotho government to look for an alternative way to finance the building of a hospital. A Public Private Partnership (PPP) was found to be the most suitable way to achieve this objective.

The new hospital, a first of its kind in Africa, delivers greatly improved, high-quality, publicly and privately funded health care services and serves as the main training facility for all health professionals. It serves 20,000 inpatients & 310,000 outpatients per year. The hospital is a shining example of the impact private investment is having on Africa’s troubled health sector.

The Government provided USD$52 million while the total cost of the project was USD$120 million.

The project intends to achieve better value for money by providing better quality services and a higher variety of services than those provided by public hospitals but at the same cost as other public hospitals.

Minister of Energy, Minerals and Water Affairs Hon. Timothy Thahane, speaking at the high level dialogue between Ministers of Finance and Health on “Value for Money, Sustainability and Accountability”, said the project was affordable for the government. On an operational cost comparison, the government does not pay much more and from the patient perspective, services are affordable and cost the same at any other public health facility in the country.

This high level dialogue was organized by the African Development Bank and Harmonization for Health in Africa (HHA) partners in Tunis on July 4-5, 2012. The conference gathered Ministers of Finance and Health and/or their representatives from 54 African countries, African parliamentarians as well as over 400 participants from the public and private sectors, academia, civil society and media globally. His Excellency Hamadi Jebali, Prime Minister of Tunisia, Dr. Donald Kaberuka, President of the African Development Bank, and Dr. Margaret Chan, Executive Director of the World Health Organisation delivered the opening remarks.

Distinguished guests such as Dr. Michel Sidibe, Executive Director of UNAIDS, Dr. Babatunde Osotimehim, Executive Director for UNFPA, Mr. Gabriel Jaramillo, General Manager of the Global Fund to Fight AIDS, Tuberculosis and Malaria and Mr. Seth Berkeley, CEO of the Global Alliance for Vaccines and Immunizations (GAVI) delivered keynote speeches.

High-profile speakers like Julio Frenk, Dean of the School of Public Health, Harvard University and Hans Rosling, Chairman of Gapminder Foundation also delivered keynote speeches during the conference.
This conference emphasized the urgent need for greater domestic accountability, reduced dependence on foreign aid and value for money in the delivery of health services in Africa. It gathered the expertise from all over Africa as well as globally featuring speakers from India, China, Brazil, Vietnam and Kyrgyzstan. This high level dialogue culminated in a Tunis Declaration endorsing, among other things, the prioritization of high impact interventions, which lead to results.

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