By Paul Clyde, President of WDI
This past summer, Ghana was selected as the host country for the Secretariat of the African Continental Free Trade Area (AfCFTA), a group of countries with a population of 1.3 billion and a combined income that rivals that of France. These 54 countries will allow free trade between them beginning in July 2020. No company can afford to ignore this market or, more generally, any low- and middle-income country (LMIC). This is especially true for health care companies.
LMIC markets, as categorized by the World Bank, are already large — and they are growing at a much faster pace than high-income countries (HICs). According to the World Bank, total health care expenditures in LMICs were 11% of total health care expenditures in HICs in 2000. By 2015 that percentage had jumped to 25%* and this understates the change. Twenty countries moved from LMIC to HIC between 2000 and 2015 and were therefore counted in the total health care expenditures for LMICs in 2000, but not in 2015. No countries moved from high income to low or middle income over the same period. If we keep the countries that were in the LMIC category in 2000 in the calculation for 2015, the total health care expenditures for LMICs were 29% of 2015 total health care expenditures in high-income countries. Put differently, while HIC health care expenditures were growing at a fast pace at the beginning of the century, LMIC health care expenditures were growing almost three times as fast, according to World Bank data.
