While the stock market grows more volatile, one form of global transaction shows steady growth: remittances sent from nationals working abroad back to their families at home. Remittances to low- and middle-income countries are projected to increase by just over 10 percent in 2018 — up from just over 7 percent in 2017 — to reach $528 billion.
African countries need to put in place universal health coverage.—
This is more than triple the amount sent globally for development aid, and a huge amount, by any standard. It plays a crucial role in combating poverty through supporting the consumption, education, and health expenditures of households. But its impact could be even greater. Giving family members working abroad the option of investing even one penny of every dollar sent home into health insurance plans could transform the health of families and of nations.
A close look at Nigeria shows what this could mean. Within Africa, Nigeria receives the lion’s share of remittances — an estimated $22 billion, out of $69 billion for the continent as a whole. This $22 billion is equal to 88 percent of Nigeria’s 2018 federal budget and 2,219 percent of its 2018 federal health budget, which amounted to just $976 million in 2018.
At an estimated 15 million people, the Nigerian diaspora is large and growing. One cent on each dollar remitted would have yielded $220 million toward health insurance in 2017 alone. Other African countries would have likewise received significant boosts to health resources: $22 million in Ghana; $8 million in Ethiopia; and $9 million in South Africa.
These sums would quickly increase the number of people who have health insurance, and therefore the size of the insurance pool. Because health insurance is about “risk pooling,” this would also make insurance more affordable: by further increasing the size of the pool, the risk to insurers would lessen, along with the cost of plans.
Remittances by the African diaspora, if properly channeled, have the potential to be the game changer in Africa’s push toward universal health coverage — programs that ensure that everyone has access to quality health care for basic prevention and treatment without suffering financial hardship. In its absence, millions of Africans experience catastrophic health emergencies that push them into poverty every year.
The African diaspora could change this. Rather than supporting their families through one health emergency at a time, it could help their families pay for health insurance that provides preventative care — and avoid many of those emergencies.
Professional African diasporan organizations could play a catalytic role in establishing this structured allocation of remittances. The membership of organizations such as the Association of Nigerian Physicians in the Americas in the United States and the Medical Association of Nigerians Across Great Britain understand the importance of health insurance. They could exert their influence to pioneer such a change. Their annual conferences could tackle this issue, with sessions that bring together prospective partners to explore innovative mechanisms for health insurance remittance channels.
One possibility is for the African diasporan community to partner with health insurance companies. Already, Novo Health Africa has created Connect Care health insurance plans that enable Nigerian Diasporans to pay for health insurance for families and friends back home.
To be sure, African governments also must be at the table. And they must exercise political will to provide universal health coverage. This means increasing national budgetary allocations to health and meeting the continent’s collective goal of dedicating 15 percent of national budgets to health. They can take a cue from Nigeria, which recently budgeted the Basic Health Care Provision Fund to provide primary care services to some of the country’s poorest people, at a cost of $150 million.
African governments must also improve health infrastructure: renovate health facilities and provide basic equipment, recruit more health workers, provide better incentives, train and retrain health workers on patient-centered care, and enable lower-level health workers to provide basic primary health care services.
Innovative financial reforms could also encourage these health insurance remittances. For example, African governments could work with payment companies and local banks to reduce fees paid for remittances and allow some of these savings to be earmarked for health insurance. At 9 percent, the average cost of remitting in sub-Saharan Africa is the highest in the world, and three times higher than the 3 percent target of the global community’s Sustainable Development Goals.
Taken as a whole, these improvements would help restore confidence in the health system, improve the quality of health care and spur the African Diaspora to commit at least one cent on every dollar remitted for health insurance.
Catastrophic health expenditure as out-of-pocket expenses across Africa relentlessly pushes people into poverty. To break this cycle, African countries need to put in place universal health coverage. But despite commitments to do so, limited national budgets for funding remains a huge obstacle. Remittances by the African diaspora, matched by African government investments in health, would provide a sustainable way of mobilizing funds and transforming health on the continent.