From billions to balance sheets: where will the money for health actually (not) come from - Part 2A

From billions to balance sheets: where will the money for health actually (not) come from – Part 2A

At the scale universal health coverage (UHC) needs, where is the money and how can it be mobilised and directed to the right investment?

This blog post launches Part 2 of the P4H series on financing health systems in the age of the aid retreat. Part 2 comprises three blog posts – 2A, 2B, and 2C – and builds on Part 1 of the series, Designing Blended Finance: The Do’s and Don’ts for aspiring Health-System Fund Architects, which explored key considerations for designing blended finance approaches for health systems.

Though our focus here is the volume of financing, the quality of money matters as much as the quantity: the wrong kind can distort priorities, entrench fee-for-service and out-of-pocket spending among the poorest, and divert scarce grant funding to the wrong causes. Simply “filling the gap” can do more harm than good.

SO WHERE IS THE MONEY NOT COMING FROM (IN THE SHORT TERM)?

ODA, philanthropy and the broader structural agenda

The structural agenda, domestic and international, is incredibly important: domestic tax capacity as well as the international tax regime discussions under the United Nations (UN); debt restructuring, the cost of capital and biased credit ratings; legacy terms of trade and currency markets reform are all critical for sustained domestic public investment in health and human capital in all countries. Such shifts can however be slow and require political will and global solidarity currently in short supply and this piece will not be addressing them.

When it comes to traditional (and easier) sources, the news is sobering. Official development assistance is in steep decline, with no sign that new donors will fill the G7’s retreat whilst philanthropy, whilst important, cannot plausibly close a hole of this size. The post-Addis private sector “billions to trillions” agenda has simply not materialised.

Africa’s institutional capital

Africa’s much-cited domestic institutional capital is reported at a little over US$2 trillion (pension ~$600bn, insurance ~$400bn, sovereign-wealth funds $164bn, reserves $530bn and public development banks $276bn).^[1] Most of it is, however, effectively locked (see the Annex “Africa’s domestic capital pools” – XLSX). Of the total, the four savings pools (US$1.7 trillion in insurance, pension and sovereign wealth funds and in central bank reserves) are the only parts that can, in principle, be redirected (with the $276bn held by public development banks also discussed briefly below). In practice the realistic figure is smaller still: of that US$1.7 trillion, only the roughly US$1 trillion held in pension and insurance is genuinely long-term, investable savings — central-bank reserves are mandate-bound offshore and most sovereign-wealth assets are held abroad or effectively frozen — so it is this ~US$1 trillion, not the US$2 trillion headline, that is the honest measure of potentially deployable domestic capital.

Capital held by insurance and pension funds is largely invested in domestic government securities (over 80% of Africa’s institutional capital sits in government paper, by statute and regulatory incentive^[2]) and is highly unlikely to be redirected towards domestic infrastructure. Pension funds (the continent’s largest pool at ~$600bn, with ~90% concentrated in South Africa, Nigeria, Namibia and Botswana) are the most-cited candidate, yet in every case the money is already committed. South Africa’s, which make up the bulk, are tied up offshore and in listed equities under Regulation 28, with barely 1–2% in infrastructure; Namibia’s and Botswana’s are similarly weighted offshore; and the genuinely domestic pools sit heavily in government securities — around 81% in Ghana, 65% in Nigeria and 48% in Kenya.^[3] Either way, little is free to flow to new infrastructure. Assuming a change of statute permitting such redirection was possible, it would also be risky as funds selling government securities to finance new development projects could disrupt the local government-securities market. The net effect would then be similar to the government simply issuing fresh securities and applying the proceeds to those projects itself. Such capital is, moreover, entirely in local currency, whereas a development project may need both local and hard currency. In short, tapping these funds is not a trivial task: as the Africa Finance Corporation (AFC) puts it, external capital is increasingly complementary, rather than foundational, to Africa’s development model.

The public development banks, for their part, are already lending for development, but collectively remain modest in scale and are widely judged to be underutilised, constrained by fragmented mandates and weak alignment with national development plans.^[4] Initiatives such as Finance in Common are slowly gaining momentum in highlighting the potential of PDBs playing a central role in the international financial architecture.

The potential for mobilisation

First, what is the potential headline figure? Once South Africa, which dominates the pools but is unlikely to send capital across borders, and the resource-rich North African economies, where the largest sovereign-wealth and reserve balances sit, are set aside, the institutional savings within reach of the lower-income sub-Saharan countries with the greatest need falls to roughly $250bn (see the Annex: pension and insurance less South Africa and North Africa – XLSX), a small fraction of the “$2 trillion” headline.

The most frequently cited reform, raising the statutory ceilings on where pension funds may invest, would change little. In the largest markets those ceilings are already generous and sit largely unused: Nigeria permits up to 15% of assets in private equity and Ghana up to 25% in alternatives, yet actual allocations run far below the limit — just 0.58% in Ghana.

A first real constraint is suitability and fiduciary duty: pension and insurance assets are workers’ deferred wages and policyholders’ claims, and steering them into illiquid infrastructure is a form of financial repression whose costs fall on savers and retirees. In Ghana’s 2022 domestic debt exchange, pension funds were very nearly caught, and participating bondholders faced losses of 60–70%.
Second, liquidity: these funds must be able to divest to meet obligations, and unlisted infrastructure is illiquid unless packaged as tradable public bonds.
Third, currency: assets held offshore in hard currency serve as a hedge and unwinding it to finance local-currency projects transfers real risk back onto the fund.
Fourth, capability: pension funds, sovereign-wealth funds and insurers largely lack the in-house teams to appraise, structure, approve and monitor this form of risk asset.

In summary, while the headline pool is significant (though smaller than often cited figures), serious obstacles stand between it and any UHC (infrastructure) financing at scale.

Remittances

As for remittances, roughly US$56bn a year to sub-Saharan Africa, these are largely household transfers rather than an investable, return-seeking instrument and so remain far from becoming a credible source for financing health systems.

Which brings us to the development banks, which we will discuss in Part 2B of this blog.

Coming next
In the next post, From Billions to Balance Sheets: Where Will the Money for Health Actually Come From: reducing risk and freeing up lending capacity for the MDBs – Part 2B, we continue our series on financing health systems in the age of the aid retreat, by discussing MDBs: their privileges and constraints, and reviewing recent innovative ways MDBs use to reduce risk and free up incremental lending.
Stay tuned for more!

Kalipso Chalkidou, MD, PhD, directs Health System Performance, Financing and Delivery at WHO. She founded the Global Fund’s health finance department and National Institute for Health and Care Excellence (NICE) International, was Global Health Policy Director and Senior Fellow at Center for Global Development (CGD), and is a Visiting Professor at Imperial, working on evidence-informed priority-setting for equitable UHC.
Learn more about Kalipso Chalkidou on LinkedIn

Rahul Singhal is a consultant advising the Performance, Finance and Delivery Department on private financing for health systems. He joined WHO in July 2016. Prior to that, he was with the Global Fund as Chief Risk Officer and Head of Programmatic Monitoring and Risk Division. Started career with Bank of America and was there for almost 3 decades spanning Corporate & Investment Banking, Market and Counterparty Risk Management, and Corporate Treasury across Asia, Europe, and the USA with expertise in structured products, global markets and capital markets, and risk management.
Learn more about Rahul Singhal on LinkedIn

Claude Opus 5 used for research. A country-by-country breakdown of these four pools, showing where each is currently deployed, is set out in a separate xl produced by Claude Opus 5.

References

[1] State of Africa’s Infrastructure Report 2026 – PDF, source: Africa Finance Corporation

[2] Iftin Fata, Africa’s Health Financing Paradox: Plenty of Capital, Too Little Investment, CNBC Africa, 14 May 2026

[3] Africa Markets Report 2025 – PDF, source: Africa Capital Markets Report 2025 – The role of insurance companies and pension funds as institutional investors in African capital markets, oecd.org, 17 November 2025

[4] Luke Anami, Africa enduring ‘good’ problem of spending own growth funds, theeastafrican.co.ke/, 3 May 2026

Published On

18 Sep 2026

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From billions to balance sheets: where will the money for health actually (not) come from – Part 2A

SO WHERE IS THE MONEY NOT COMING FROM (IN THE SHORT TERM)?