SECTOR EXPERTISE Healthcare Absa | Corporate and Investment Banking > Sector Expertise > Healthcare Strong sector focus that benefits the entire private healthcare value chain Our long-term relationships, significant balance sheet support and deep industry expertise offer incomparable insights and solutions across the entire private healthcare sector value chain. TOTAL DEAL VALUE $1.2 bn DEALS DONE 42 TOTAL CLIENTS 28 THOUGHTS FROM OUR LEADERS Consolidation, acquisitions and diversification will become key focus areas for private healthcare players in the short to medium term Healthcare is key for any economy and building resilient systems is top priority globally. Locally, the Private Healthcare sector is facing uncertainty around implementation of the National Health Insurance (“NHI”) that was signed into law in May 2024. Stagnant growth in the private medical insurance beneficiaries as a result of the economic strain felt by the consumer, in turn impacts growth and earnings of the private healthcare service providers. Growth in health expenditure will continue to outpace economic expansion in South Africa. The key drivers include an ageing population, more chronic diseases, increasing urbanisation and greater utilisation of advanced medical products and services. Private and public health expenditure will increase almost at similar growth rates over the medium term, but the successful rollout of the NHI is anticipated to drastically reduce private health expenditure over the long term. Post covid-19, key sector players have recovered from an earnings and volumes basis, whilst margins are still lagging pre-covid. This is mainly driven by the weak economic environment in South Africa which leads to stagnant growth in insured lives. Margins are under pressure due to labour and radiology services cost inflation and pressure from funders which has been a key headwind to volumes and tariffs. There is a necessity for diversification and specialisation in order to achieve growth and maximise on margins for hospital players. Whilst expansion offshore has been a trend in the past, the relative success of these endeavours has necessitated that these companies also look to the domestic market for growth that supports overall sustainability. Consolidation is inevitable for the small independent hospital players in order to build scale and compete successfully with the major players in the sector. There has been an increased level of corporate activity in the sector on the back of independent hospital players building scale as they prepare for the NHI. NHI was signed into law in May 2024, with the implementation expected to be completed in two phases. The private sector supports the key principles of NHI which is to provide quality healthcare access to all despite economic background. However, there are clauses on the NHI Bill that have raised legal issues that need to be addressed before the implementation. The strong prevalence of non-communicable diseases in the continent will be a key driver for investment in pharmaceutical industry. Post covid, the African continent is focused on investing in manufacturing capabilities in order to provide medicine to the population speedily. At Absa CIB, we see our role as not only supporting by providing balance sheet, risk management and transactional banking solutions, but also as a trusted partner who is able to provide strategic sector-relevant insights, and a deep understanding of African markets. Zizile Lephalala Head: Healthcare and Hospitality https://cib.absa.africa/wp-content/uploads/2020/07/file_example_MP3_700KB.mp3 Latest insights A look at the factors driving change in this essential sector today. RISK MANAGEMENT The energy transition provides Africa with an opportunity to accelerate its development The global shift to cleaner energy technologies provides Africa with a unique opportunity to accelerate its development and enhance its prosperity – though there are risks as well that must be carefully managed. Read more Videos In conversation with African Export–Import Bank Effective management during a pandemic needs to be supported with cross-sector partnerships and sustainable funding. Videos In conversation with The Global Fund The Global Fund is a partnership designed to accelerate the end of epidemics. Videos In conversation with Africa CDC Africa CDC is crucial in coordinating vaccination efforts to ensure we reach the 60% vaccination target. Videos In conversation with Momentum Health Momentum Metropolitan has 36 vaccination centers across the country, open to both the insured and uninsured market, and have been instrumental in bringing telehealth to the home through Hello Doctor. Videos In conversation with The Biovac Institute The COVID-19 vaccination coverage is low in Africa, with less than 2% of the 1.2bn population vaccinated. With Biovac partnering with Pfizer to produce about 100mn doses annually, Liza Eustace, Head of Healthcare, Construction and Hospitality Sectors at Absa CIB, spoke to Dr. Morena Makhoana, CEO of Biovac, about his learnings and predictions during this time. Subscribe to newsletter Please enter your contact information to receive news and updates. Full Name Company email address I would like to receive marketing communications from Absa CIB Subscribe By clicking Subscribe, I confirm that I have read and accepted the Terms of Use and Privacy Statement. OUR TRACK RECORD Feedback from our clients “Absa provided us with advice on matters related to project finance and maximising interest income on excess cash. The service received has been outstanding and we have had better-than forecasted interest earnings as a result of the guidance and restructuring provided by Absa CIB. We have also received substantial support for decision making purposes when it comes to financial instruments held with Absa.” Dorper Wind Farm – South Africa President, Trade Association - Africa "Absa has been a partner bank to ACWA Power since our first successful project bid, providing the group with project financing, working capital as well as mandated as the account bank for the project. Absa has provided great value through its service, tailored solutions, valuable insights and advisory to the group." ACWA Power – UAE and Africa President, Trade Association - Africa "As a partner bank to Marubeni for over 6 years, the Absa team has provided awesome service in assisting us to establish our South Africa office. Their always-available attitude has supported us to facilitate our entry into both the South African and African Market." Marubeni Middle-East & Africa Power Limited – Japan President, Trade Association - Africa "Having a Pan-African banking partner is very important to the group as it gives us a competitive advantage in the market. We are now able to go for the projects we want because we have a partner bank that understands our business and is ready to help us materialise our growth ambitions in the continent." Gransolar Group – Spain President, Trade Association - Africa Contact us 0860 500 703 +27 (0) 10 211 3117 rsc.corpprc@absa.co.za Subscribe for quarterly updates Analysis and data-driven insights for a changing world – delivered directly to your inbox. 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