Prospects of SMEs in Nigeria's health sector

Nigeria's Vice President, Emyo Shiba Joe, recently discussed the challenges facing the human health and social services sector of the economy at the CNBC Africa Building Africa Debate. According to the National Bureau of Statistics, the sector contracted by 2.3 percent in the third quarter of 2016, a decline from the 2.5 percent growth recorded in the same period in 2015. This contraction has sparked concerns about the future prospects for small and medium enterprises (SMEs) in the health sector. To shed light on this issue, Chioma Ogwo, an emerging business asset manager at Diamond Bank, shared her insights on the investment opportunities and challenges facing SMEs in the health sector. Ogwo emphasized the increasing interest from both the government and the private sector in investing in the health sector. She pointed out that the 2017 budget included a 14 percent increase in allocation to the health sector, highlighting the government's recognition of the sector's critical importance to the economy. Additionally, many state governments are looking to implement health insurance schemes to provide affordable healthcare to citizens and generate income for healthcare providers. This concerted effort is expected to create a conducive environment for SMEs to thrive in the health sector. Ogwo also noted the growing involvement of development organizations, NGOs, and financial institutions in supporting the health sector. These partnerships are crucial for addressing the financial needs of SMEs in the health sector, particularly in acquiring expensive equipment, maintaining facilities, and recruiting competent staff. Access to finance has long been a challenge for SMEs in Nigeria, but Ogwo expressed optimism that the growing interest in the health sector would improve access to funding for aspiring entrepreneurs. Medical tourism has been a persistent issue in Nigeria, with many individuals seeking healthcare services abroad, leading to an estimated $1.1 billion expenditure annually. This trend not only drains valuable resources from the country but also undermines confidence in the local healthcare system. Ogwo stressed the importance of redirecting these funds back into the Nigerian healthcare system to enhance its quality and strengthen the economy. Despite the challenges posed by medical tourism, Ogwo expressed confidence in the Nigerian health system and highlighted the potential for growth and development in the sector. In conclusion, while SMEs in the health sector face significant financial and operational hurdles, the increasing investment and support from various stakeholders present promising opportunities for growth and innovation. By addressing the sector's funding needs, enhancing infrastructure, and promoting healthcare services locally, SMEs can contribute significantly to the advancement of Nigeria's healthcare industry.