MICHAEL MYNHARDT: Wealth equals health

Economics is unlike many of its academic cousins; it lacks the precision of engineering and physics, the vitality and urgency of medicine, the elegance of architecture, or even the pragmatism of accounting and finance. It’s known as the “dismal science”, stripping down human behaviour to quantifiable phenomena along lines of scarcity, supply and demand.

Nowhere is the cynicism of economics more apparent than in the finding that, as a country’s wealth improves, so does its health; changes in GDP per capita correlate with changes in lifespan.

Findings such as these are critical to improving life for millions. If diagnostic medicine seeks to cure through an accurate understanding of the causes behind malaise and maladies, economics’s diagnosis of social ills is aimed at improving lives through an accurate understanding of the problems societies face.

That money is a barometer of a community’s health is shocking and predictable in equal measure. For most, this will elicit little more than apathy, given the constant doom on display. This apathy towards the wealth-health correlation manifests because many see it as something to exploit.

For some, the relationship inspires avarice, informing schemes to chase money through quackery and extortion (think of the pharma bros of Martin Shkreli’s ilk, or the sudden inaccessibility of the diabetes medication Ozempic).

The good news is that once we are aware of the irrationality of our attitudes, they can be rectified. Pessimism surrounding medicine’s link to wealth and financial prosperity mirrors our evolutionary desire to avoid loss as much as possible. Economic thought somewhat redeems itself by pointing out that humans hate losing more than they enjoy winning.

But once we are aware of this bias, the disparity can flatten — and a whole realm of possibilities, otherwise hidden from view, opens up. Sure, there is a link between wealth and health and some may exploit this, but we can also harness this relationship in the opposite direction: improving the health and wellbeing of people through investment.

For Africans, perpetually underserved and neglected, this presents a lifeline. Over the coming decades, African populations are set to continue to grow (while the opposite is slowly happening in many non-African nations).

At the same time, Africa’s middle class is set to grow faster than its population, reducing the proportion of those stuck in poverty. With greater spending power emerging from this middle class, a desire for improved services and standards of living is set to manifest through government and private investment in improved infrastructure, service provision and social security.

From the perspective of an investor, the opportunities in Africa’s health care extend beyond the altruistic, as the continent’s many markets are diversified according to the needs of its citizens.

From neonatal care, obstetrics and paediatric care to end-of-life support, a healthy and longer life feeds the need for greater medical care and specialisation. Then there are the many diseases, both chronic and incidental, from the slightly inconvenient to the life-threatening. The need for health-care services has always existed, but with the looming change in economic profile this need will translate into demand.

With rising demand, additional supply will be needed. At present, much of the continent’s medical needs are sourced from beyond its shores. However, there are numerous good reasons to invest in the local production of medicines and other health-care products. For one, it secures the health security of Africans, reducing reliance on foreign actors (as was shown during Covid, Africa’s medical situation is ill-served by remaining in the hands of the Global North). Second, local manufacturing, regulatory harmonisation and product innovation serve to diversify the economy, adding layers of complexity that will lead to a spillover in adjacent industries and, as such, promote job creation and further growth.

The continent’s various multinational governmental organisations have, despite the enormous challenge, resurrected Africa’s future. Initiatives and structures that are already in place or are imminent (such as the African Continental Free Trade Area and the African Pooled Procurement Mechanism) will allow for investors to kick-start the process. This can become self-perpetuating: investing in health care promotes longer, better lives for Africans, which creates new jobs and industries and ultimately further stokes demand for medical services.

Intelligent investors who can bypass their illogical aversion to hypothetical losses will be best placed to kick-start this process, reaping the benefits and sowing success and prosperity for many. Yes, better health generally accompanies greater wealth; but wealth can support sustainable health as well.

Mynhardt is CEO and co-founder of MMH & Partners Africa