Focus on social protection in Africa, with Max de Font-Réaulx

Max de Font-Réaulx is the CEO of Théorème, a consulting firm dedicated to the management of business risks. As a specialist of health insurance issues in Africa, he works with several I&P's investees so as to help them set up or improve their healthcare programs. 

In an editorial drafted for our latest newsletter, he reflects on the issues at stake and the progress made since 2015.

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Editorial of Max de Font-Réaulx

"Health security is a key concern for African families, regardless of their social and economic status.

Besides the major and well-known pandemics (AIDS, malaria), we observe a rise of chronic diseases (sickle-cell disease, diabetes, hypertension) and diseases linked to pollution and poor living conditions. Life expectancy in Sub-Saharan Africa is the lowest of all the major continents, reaching just over 50 at the end of 2010 (56 or 57 today).

Given the situation, the healthcare structures are still very insufficient and poorly distributed on the territories.

Social protection is one of the key issues developed by Investisseurs & Partenaires (I&P), which brings its support to expand the health coverage programs of its partner companies. The stakes are high: for each employee covered, it’s a whole family benefitting from social protection and healthcare. But considering the size of the companies, the challenge is to find efficient and economically viable solutions.

The equation is a difficult one. Except for very rare exceptions such as Gabon, there is no "social security" to provide a minimum basis of protection. Families can therefore count only on their own resources, the solidarity of their relatives, or the solutions put in place by the companies.

The family’s incomes are often too modest to cover health expenditure. Health insurance is therefore highly expected by the employees. For the companies, it is a tool of attractiveness and loyalty, a means of fighting absenteeism, an ethical requirement, but also an essential factor of productivity.

The implementation of health insurance programs encounters many obstacles.

Given wage levels, family size, and the high cost of healthcare, basic insurance coverage can be costly for small and medium businesses, representing up to three months’ wages. The participation of the employees is limited, even if necessary to make them accountable and to combat the pervasive risk of fraud. Businesses should work on preventive measures, with for example, the assistance of a medical adviser.

The collaboration between I&P and Théorème started with a feasibility study, conducted with the financial and operational support of FISEA (PROPARCO). The objective was to identify the existing situation with a sample of fifteen businesses in 8 different countries in order to measure the constraints specific to each country and to define common guidelines for the portfolio, adaptable to the situation of each company supported by I&P.

The results of this study as well as the stakes involved in setting up health insurance were presented during the 2015 training seminar organized by I&P, gathering 35 entrepreneurs.

Since then I&P provides technical assistance to its partner companies, through Theorem and its African network, to advance these technically and economically complex issues. Support is given in a very concrete way to set up or improve health insurance systems in the companies, bringing an answer to the main questions at stake: Who should benefit from the insurance? For what health benefits and what rates of reimbursement? How to get the best conditions from local insurers? How can these systems be managed once they are in place? How to approach social dialogue with employees?

85% of I&P’s investees currently offer health insurance schemes to their employees. More than half of the companies in portfolio have set up or improved their healthcare programs since I&P investment. "

Further Readings

→ I&P strenghtens its health insurance policy for IPAE portfolio (March 2016)

→ Proparco's magazine Private Sector and Development on health insurance in Africa (Sept. 2016)