Nigeria’s Cross River State, with just over 0.5 hospital beds per thousand people, has the lowest density of hospital infrastructure in the South-South region of the country. While there is nascent private sector involvement in the health sector, most healthcare delivery is provided by the state; however, the network of public sector hospitals and healthcare centers does not meet the region’s needs. With IFC as transaction advisor, the government of Cross River State is structuring and implementing the first health public-private partnership (PPP) in Nigeria: a new referral hospital in the capital city of Calabar that will deliver an affordable international standard of healthcare for the state.

The hospital facilities in Cross River State are inadequate: in addition to deteriorating infrastructure and a lack of skilled staff, the facilities lack advanced medical equipment. As a result, the quality of public healthcare services is sub-optimal. Moreover, the population perceives the quality of healthcare as poor, resulting in a loss of confidence in the facilities, a greater reliance on self-medication, and an exceptionally high rate of medical evacuations to other countries. The lack of advanced diagnostics is a serious problem and patients are often forced to travel to neighboring states for imaging services; there is also limited access to quality high-risk obstetric care, intensive care units, and to emergency/trauma care.

With a population of approximately 3.4 million people, a shortage of doctors exacerbates the state’s healthcare problem. Apart from the federally-funded teaching hospital, only 36 doctors and 938 nurses employed by the state cover the state’s secondary health facilities. This number translates into an alarming doctor-population ratio of 0.21 doctors per 10,000 patients—one-fifth of the Sub-Saharan African average.

Take one PPP and call me in 10 years

To confront these challenges, the Cross River State government proposed the establishment of a 105-bed referral hospital to serve the needs of the capital city, Calabar, and its environs. A new gateway clinic to be attached to the hospital will offer primary healthcare services and a solid referral mechanism for the PPP hospital, ensuring that only patients requiring secondary care are admitted to the hospital. Starting in September 2011, IFC facilitated the participation of qualified private sector firms in the design, construction, equipping, and management of the proposed hospital through a transparent tender process.

The hospital is anticipated to be operational in 2015. The 10-year project term will include up to two years for construction and eight years for operation. The construction and equipping of the hospital, totaling approximately $37 million, will be financed by the state government. The consortium will bear some project development costs, deliver a turnkey hospital, and will then be responsible for running the hospital operations under terms defined in the PPP agreement. At the end of the concession period, the facility will be transferred to the government.

The hospital will be managed as a state referral hospital, providing quality and affordable access to regional level clinical services. The consortium led by UCL Healthcare Services includes Cure Hospital Management Services, a U.S.-based firm which will provide clinical services, and Simed International, a Dutch firm which will deliver the medical equipment.