Healthcare in Africa faces a myriad of challenges from poor infrastructure to lack of funds but technology is transforming healthcare delivery in Africa.
Despite the monumental gains being recorded, Africa’s burden of disease is disproportionate to its population size. In addition to communicable diseases like malaria and tuberculosis, the continent is dealing with an increasing prevalence of non-communicable diseases such as cancer, diabetes, and cardio-respiratory disease.
The result is a double disease burden placed on a region where public resources are limited and health systems are already weak and overburdened. Additionally, Africa’s shifting demographics pose another significant health challenge.
It is imperative that Africa’s rapidly expanding youthful population, which is predicted to be the largest workforce in the world by 2040, has access to good quality healthcare to capture the benefits of this demographic dividend.
Rather than deterring private investment in Africa, these challenges present numerous commercial opportunities for potential investors. The private sector is playing an increasingly important role in financing healthcare in Africa.
According to a report by AVCA, the healthcare sector in sub-Saharan Africa has shown considerable growth in the last twenty years.
Between 2015-2020, 97 private equity (PE) and venture capitalist (VC) investments worth US$1.3bn occurred in healthcare in Africa.
In 2020, healthcare technology investments represented 45% of the total number of investments within Africa’s healthcare sector.
The top 5 countries by share of volume of PE & VC fund investments in healthcare in Africa, between 2015-2020 are Nigeria, Morocco, Egypt, South Africa, and Ghana. Deals in the healthcare sector represented 8% of the total deal volume in 2019 and 2020 respectively, showing the continued investor commitment to bridge the healthcare gap on the continent.
The share of the total reported value of healthcare deals in Africa in 2020 increased to 16% of the total reported deal value, from only 3% in 2019. Between 2015 and 2020, the total value of final closed PE & VC funds in Africa was US$18.1bn. Of this, 50% originated from funds that included healthcare as a targeted sector in their investment mandate.
Private sector healthcare providers currently deliver nearly 50% of all healthcare in sub-Saharan Africa and nearly 60% of healthcare financing on the continent comes from private sources.
Speaking to Ugo Iwuchukwu, Brands and communication manager at Helium Health on why healthcare investment is increasing in Africa, he said:
“The situation with the new investments into African healthcare is a melting pot of a couple of things. First, it was an inevitability. Healthcare is a business that affects everyone and in terms of technology development, it’s decades behind contemporary industries like finance or even telecommunications. Think about how you can do virtually any transaction online but you could barely get any healthcare activity done virtually. So, this meant that it had always been a place that could create value accretion to all the stakeholders.
Second, the pandemic unwittingly put a magnifying glass on the state of global healthcare and it showed what people like Helium have been saying which is that there is a lot of work to be done to build not just Nigeria but even the global healthcare industry. So that’s giving more momentum to what was already beginning to simmer before the pandemic.”
Digital technology is featuring more prominently in Africa’s healthcare sector as more investors are coming on board and technology is increasingly being deployed to address various healthcare challenges across the continent.
Although investment in the healthtech sector is still in the nascent stage compared to other sectors like the fintech sector, the race has clearly begun and it is only a matter of time before we see the kind of success achieved in the fintech sector being replicated in healthcare across Africa.