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TECH REVIEW

The Next Wave: Can healthtech prepare Africa for another global health crisis?

Published

on

April 24, 2022
The Next Wave provides a futuristic analysis of BizTech and innovation in Africa. Subscribe here to get it directly in your inbox on Sundays at 3 PM (WAT).

Earlier this week, health tech startup mPharma’s CEO Gregory Rockson tweeted: “I like to think that mPharma is this way as well. Software to organize health data (Bloom) + operating pharmacy retail (QualityRx) + PBM (mutti) + logistics infra (VMI) + telemedicine (mutti Doctor) + diagnostics (mLab) etc,” in response to a Elon Musk tweet where he opined that Tesla might as well be multiple startups. The tweet caught my attention and made me think about the vast opportunities for innovation that exist in Africa’s healthcare sector.

Data from the World Health Organization (WHO) shows that even though Africa carries 25% of the world’s disease burden, its share of global health expenditures is less than 1%. But it gets worse—the continent manufactures less than 2% of the medicine it markets and sells to healthcare facilities, hospitals, and pharmacies.

Africa will need to leverage innovation to establish a stronger health workforce and infrastructure, increase life expectancy—currently 64.5 years to surpass the global average of 73 years (for both sexes)—and achieve self-sustainability in the event of another global health crisis.

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Source: Fikayo Idowu, TechCabal Insights.

Why innovate healthcare

African healthcare sector struggles with multiple problems—paper and pen data storage, inadequate medical equipment and funding, inefficient drug supply chains, and last-mile health service delivery.

With patients constantly seeking access to an efficient healthcare system and investors seeking out the next growth engine in Africa; global consulting firm Mckinsey wrote that Africa might be “the only pharmaceutical market where genuinely high growth is still achievable. “ It is no wonder its healthcare industry is attracting global interest. I mean, why wouldn’t it? For instance, Africa’s healthcare sector will be worth an estimated $259 billion by 2030. There is a lucrative opportunity for the private sector to get a slice of the pie. Already about half of Africa’s health expenditure is funded by private sector entities and development partners. 

In December last year, when only 3% of Nigerians had received full COVID-19 doses, the country destroyed a million doses of expired vaccines, partly due to erratic power supply, costly energy costs, and insecurity that made insurgency-ridden parts of the country inaccessible. A month after getting rid of a large portion of its vaccine supply, Nigeria secured the help of the private sector for ultra-cold storage facilities to store and distribute a new set of vaccines it was expecting.

Source: Fikayo Idowu, TechCabal Insights.

After months of lobbying richer countries to share their vaccine supply, Africa eventually got vaccines delivered through The COVID-19 Vaccines Global Access Facility (COVAX), but about 2.8 million, or 0.5% of the COVID-19 vaccines received across Africa expired before they could be used. And while the short shelf life of these vaccines, which arrived on the continent 4 to 8 weeks to expiration, didn’t help; Africa’s struggling healthcare industry exacerbated the situation. A number of hospitals on the continent frequently experience ill-equipped storage facilities, staff shortage, unavailable funds and constant medical brain drain.

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Recent insights from Salient Advisory reveal that 61 companies in sub-Saharan Africa are using technology to make distributing healthcare products more efficient—this figure is twice more than what Salient Advisory tracked in its 2019 report. What this means is that healthcare product distribution will get more efficient as the private sector or tech innovators could stop future vaccine wastage.

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But health innovation is on the rise on the continent; Salient Advisory identified that 60% of the health tech startups operating in the continent today were founded in the last 5 years.

Perhaps, the biggest selling point of healthtech innovation in Africa is its ability to reach patients who are unable to access healthcare services in rural areas. This is a big deal for Africa because Africa is one of the least urbanized places in the world—with half of the people living in rural settlements, and the other half living in urban areas.

As far back as the mid-2000, when internet connectivity was very low on the continent, African health operators innovated around this constraint when they created Frontline SMS. Frontline SMS uses simple text message technology to allow patients to send images of blood samples taken with a basic camera phone to medical practitioners without having to go to the clinic. This would later become the forerunner of the booming telemedicine subsector in the African health ecosystem. Innovations like digital data management, big data analytics, telemedicine, and digital retailing will grow to solve the problem of Africa’s healthcare problems.


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Emerging trends

In time past, regulation in the digital and online pharmacy space has been fuzzy and non-existent but today African governments are stepping up to regulate online pharmacies. For example, a new regulatory framework in Nigeria looking to regulate online pharmacies and Ghana’s newly launched national e-pharmacy platform, which will serve as a central portal for online pharmacy operators’ activities.

Yomi Kazeem, a senior consultant at Salient Advisory, told TechCabal in a video interview, that he is both sceptical and excited about these new regulations, and admits that regardless of their outcome, these regulatory frameworks will shape Africa’s healthtech industry. “Innovation in this space is fast-moving, so, the question is how quickly can regulation catch up? How can regulators accelerate the process of catching up? It turns out that in many cases, regulators have resource constraints and in some cases, they don’t even understand the ecosystem,” Kazeem said.


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“If regulation is underdeveloped, it will inhibit growth. When creating these regulations, it’s important that African countries do not seek to over-regulate; having innovation-friendly regulatory environments is absolutely important.”

He also explained that, in the past year, Salient Advisory has been recommending cross border health regulations to regulators in Nigeria, Ghana, Kenya, and Uganda.

“This isn’t in action yet, but there is potential in having a multicountry, or cross country working groups exchanging best practices, incorporating them locally and potentially creating a uniform regulatory framework. This will also make expansion across the continent by African healthtech companies easier.”

According to investment data by Briter Bridges, African health startups and biotech startups raised $392 million in funding in 2021—an 81% increase from 2020’s $110 million which was the year with the highest in health tech history on the continent. But while fintech accounts for a massive 62% of the total funding last year, health tech startups received only 8%. But Kazeem explained that health care funding in Africa is not near enough as healthtech funding is still less than 10%.

While Africa’s health tech sector is gathering some momentum, access to private sector funding and venture capital will help to drive vaccine research, biotechnology, and vaccine production on the continent.

From the Cabal 

Nigerian fintech, Syarpa, raised $500k in pre-seed funding to foster the growth of its community and expand its operations beyond Nigeria. Read more about its raise here.

Nigerian Proptech company, RentSmallSmall want to connect tenants with landlords while addressing both their pain points. Read more about its plans to achieve that here.

Have a great week.


Thank you for reading The Next Wave. Please share today’s edition with your network on WhatsApp, Telegram and other platforms, and reply to this email to let us know what we can be better at.

Subscribe to our TC Daily Newsletter to receive all the technology and business stories you need each weekday at 7 AM (WAT).

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Sultan Quadri, Staff Writer, TechCabal.

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