BACKGROUND: The identification of safe and effective alternatives to blood transfusion is a public health priority. In sub-Saharan Africa, blood shortage is a cause of mortality and morbidity. Blood transfusion can also transmit viral infections. Giving tranexamic acid (TXA) to bleeding surgical patients has been shown to reduce both the number of blood transfusions and the volume of blood transfused. The objective of this study is to investigate whether routinely administering TXA to bleeding elective surgical patients is cost effective by both averting deaths occurring from the shortage of blood, and by preventing infections from blood transfusions. METHODS: A decision tree was constructed to evaluate the cost-effectiveness of providing TXA compared with no TXA in patients with surgical bleeding in four African countries with different human immunodeficiency virus (HIV) prevalence and blood donation rates (Kenya, South Africa, Tanzania and Botswana). The principal outcome measures were cost per life saved and cost per infection averted (HIV, Hepatitis B, Hepatitis C) averted in 2007 International dollars ($). The probability of receiving a blood transfusion with and without TXA and the risk of blood borne viral infection were estimated. The impact of uncertainty in model parameters was explored using one-way deterministic sensitivity analyses. Probabilistic sensitivity analysis was performed using Monte Carlo simulation. RESULTS: The incremental cost per life saved is $87 for Kenya and $93 for Tanzania. In Botswana and South Africa, TXA administration is not life saving but is highly cost saving since fewer units of blood are transfused. Further, in Botswana the administration of TXA averts one case of HIV and four cases of Hepatitis B (HBV) per 1,000 surgical patients. In South Africa, one case of HBV is averted per 1,000 surgical patients. Probabilistic sensitivity analyses confirmed the robustness of the model. CONCLUSION: An economic argument can be made for giving TXA to bleeding elective surgical patients. In countries where there is a blood shortage, TXA would be a cost effective way to reduce mortality. In countries where there is no blood shortage, TXA would reduce healthcare costs and avert blood borne infections.