The fund will provide capital to the companies that show high potential for growth in diagnostics, hospitals and pharmaceuticals. It is targetting a final capitalisation of $200m.

Growth in Africa’s middle classes – expected to account for half the continent’s population by 2020 – would boost this part of the healthcare market, the bank said, and RxHF targets are aimed at meeting the needs of such people, who want specialised high quality, but affordable healthcare.

Investments will be made first in Egypt, Tunisia and Morocco and then scaled up into Ethiopia, Kenya, Nigeria and Sudan with substantial transfer of lessons learnt as technology is developed.  

The bank said Africa was hampered by a widening healthcare delivery gap characterised by workforce shortages and low insurance coverage in the face of a disproportionate disease burden, combined with its growing population base and changing lifestyles.

These factors called for improved healthcare systems and significant participation of private providers, it said.