1. Private Sector Participation in
Development Cooperation –
experiences and potential
East Africa Healthcare Federation
Conference 2012:
„Partnerships: Harnessing opportunities and Innovation“
Julia Fimpel (Program Manager, KfW)
Presenting on behalf of the Health Program of
German Development Cooperation, Kenya
May 2012

2. 1. The role of the private sector in the present GDC
portfolio
● Germany‘s strategy on Public Private Partnership in Development Cooperation
Objectives:
● Mobilizing private capital and know how to drive development
● Increase efficiency in the delivery of public services
● Complement government regulations by voluntary commitment by private companies
● Enhancement of development programs by private contributions
● Supporting small and medium enterprises in tapping a new market
„…a dynamic and innovative private sector is the ultimate engine for growth, creating new,
productive jobs, generating tax revenues and thus making a major contribution to the funding
of social security systems. An effective strategy for boosting the private sector can result
in lasting increases in employment and income levels, also for the poor and
disadvantaged. In a context of sound public policy and in close cooperation with the public
sector, these can be used to boost a country‘s development prospects.“
Dirk Niebel, Minister for Economic Cooperation and Development, April 2012
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3. Example 1: Demand side financing systems in Kenya
and Uganda …
 shift purchasing power to consumers Choice!
 address demand-side barriers aimed at stimulating
demand for health services
Solidarity!
 To clients, introduce the concept of a pre-payment,
which is unrelated to risk
 Pay providers for outputs (e.g. no of deliveries), rather
Efficiency!
than inputs (like salaries and supplies)
 To providers, introduce a competitive environment,
Quality/service
where providers need to advertise their services and
orientation!
adopt a client oriented and quality conscious
perspective
 Guarantee payment to providers Confidence!
 Provide services without additional payment
Complementarity!
 Integrate private and public provision of health care
 Develop systems for long-term health financing (e.g.
claims processing, accreditation systems)
Sustainability! Photo: Dirk Mueller

4. Impact of voucher programs
Utilisation
 Uganda contracted clinics: 200% increase in STI visits; 15% increase of STI
treatment among those with STI symptoms
Targeting
 Successful targeting of poor and at risk populations.
 Uganda: fewer women reported lack of money as barrier to care after
program began.
Knowledge
 Uganda: Knowledge of the program spread significantly in the population
and more people were able to identify STI symptoms.

5. Impact of voucher programs
Health impact
 Uganda: marked reduction of syphilis prevalence in just one year from
7.3% (2006) to 2.9% (2007) in areas near to contracted facilities (<11 km)
– a reduction of 57%!
 Utilisation of STI treatment went up in the same timespan from 30% to
39%
Cost-effectiveness
 Uganda: Safe motherhood programme is most likely cost-effective when
comparing existing public services with the added voucher scheme:
 Incremental cost-effectiveness ratio: < $ 200 per DALY averted
 More detailed cost-effectiveness analyses needed

6. Example 2: Social Franchising Network „AMUA“
The AMUA-network
● Franchisor and Franchisees pursuing a social
objective
● By end of 2012 there will be 270 franchisees in
5 regions in Kenya
Results
● Over 700.000 clients served and over 230.000
CYP generated between July 2010 and
January 2012
● Cervical Cancer Screening introduced
(effective and highly demanded)
Public-Private-Cooperation ● Effective linking HIV/AIDS and FP (over 30.000
PMTCT, over 100.000 VCT/PICT)
● Use of national guidelines for medical
● Community health workers are essential for
interventions
sensitizing and mobilizing target groups
● Strengthening cooperation with DHMTs, ● Cost-efficient approach (counselling, choice of
especially in reporting and contraceptive FP method)
supplies
● Private providers receive FP commodities
through public system
● Steering committee with the Ministry of Health 6

7. Example 3: Promising practice
Viable Solutions for Health Care Waste Managment (HCWM)
Partners HCWM Package
NWH (Nairobi Women’s
Hospital) Regulation by NEMA, MoPHS, MoMs
GIZ (German Technical Collection Transport Storage Treatment Disposal
Cooperation)
GIZ: Facilitation, Training, MIS development
Regulation
National Environmental
Authority (NEMA)
Target Clients
Rules, Inspection and Licensing
Small and medium sized private clinics and hospitals for
Transportation which formal HCWM set up is not cost-effective
Contracted Transportation Results till date
Companies
 Affordable HCWM services
 NWH runs its waste mgt facility at margin with 10 regular
Treatment of Waste
customers
NWH
 NEMA licensed transportation companies and NWH
against service fee/ kg waste
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 Clarified mandate of regulatory bodies (NEMA, MoPHS

8. 2. Mutual benefits of cooperation for
donors/government and private stakeholders
Donor Agencies and Private Sector
Government
Advantages - More support in addressing the - Strategic partnerships, e.g. through
from Health Care Challenge Joint Ventures
cooperation - Mobilising private ressources for - Long-term business relationships
health - Market entry / extension of
- Direct and cost-effective coverage
achievement of outputs (MDGs) - Risk mitigation through subsidies
- Outsourcing of services can yield (e.g. Funds with first loss tranches,
efficiency gains subsidies to cover the poorest etc.)
- Innovative solutions - Reputational advantages
- Well trained staff and expertise - Dialogue with government
- Better access to information on
private sector activities and
quality monitoring
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9. 3. Challenges in working with the Private Sector
● Sustainability aspects (knowledge transfer, funding…)
● Communication / government ownership / „Steering", i.e. continuous
coordination/cooperation between public and private sector
● Different circumstances (e.g. costs of service provision)
● Own contribution (financial or in kind) by private sector
● Compatibility of objectives: market entry; profit, turnover, reputation, CSR…vs. coverage,
quality, low-cost products for the poorest, risk sharing…
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10. 4. Outlook: Innovative solutions by the private sector
● Outsource certain activities to TPA but insist on knowledge/systems transfern (BOT)
● Make use of existing well-developed private networks to reach out to more people, esp.
In the informal sector
● Joint Ventures between public and private institutions to increase their efficiency and
enable organisational learning
● Innovative and adapted solutions, to reduce cost and address the people at base of the
pyramid
● Incentives to deliver quality and evidence
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11. Thank you for your attention.
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