Africa’s health tech industry was the only sector to experience year-on-year growth in funding last year, with a 7% increase. As the continent grapples with the highest disease rates on the planet, the wave of innovation and growth in Africa’s health tech couldn’t have come at a better time.
However, the hurdles for investors and founders today transcend funding or digital transformation, taking on cultural and socio-economic dimensions.
Let’s explore Africa’s health tech industry in full frame.
Those paying attention to the African VC and investment space would have cause to believe that the continent comes away unscathed from the current investment crunch. They might be right. After all, a whole lot has been happening. Here are a few major talking points:
In a nutshell, the value of the health tech market in Africa is playing an increasingly formidable role as a key sector for economic growth on the continent.
Africa is a vast continent with diversity, both in culture and healthcare practices, that poses a wide range of challenges and opportunities. From the vibrant markets of Nairobi to the rural expanses of Nigeria and cultural corners of North Africa, each locale tells a unique story of challenges and triumphs of health technology in Africa.
Let’s explore the complexities of health tech.
Public healthcare, the cornerstone of a nation's health, has always been mired in underfunding across most of the continent.
The "Abuja Declaration" of 2001, where African leaders pledged to allocate at least 15% of annual budgets to healthcare, has failed to pan out well after more than two decades. Nigeria, the birthplace of this commitment, allocated less than 6% of its 2023 budget to the sector.
In East and West Africa, there’s a preference for transacting with trusted healthcare providers with the community's stamp of approval rather than a tech-driven healthcare company.
Also, with the incredibly fragmented ways of life owing to immense cultural diversity, you’ll find it difficult to win customers’ trust if you don’t speak their language, share a common history, and appreciate a familiar set of values. While technology promises to digitise and aggregate healthcare services, creating trust remains elusive without an existing receptive culture.
A 2022 research paper paints a stark picture of self-medication growing at an alarming rate in West Africa's economic giants. Nigeria and Ghana see rates between 69.4% and 53.7%, respectively. The innate inclination to self-treat complicates the growth and advancement of the health tech industry in Africa.
Africa depends on imports for 94% of its pharmaceuticals. The healthcare sector often grapples with poor infrastructure, struggling to forecast, procure, and distribute medical supplies. At best, local pharmaceutical companies can only contribute a mere 25-30% in countries more supportive of the local industry.
Also, Africa is a hotbed for counterfeit medicine, stemming from poor quality control. The result of all this? A supply chain maze where inefficiencies are rampant.
A severe shortage of trained medical professionals, especially in rural areas, compounds the challenges. Africa grapples with 25% of the global disease load, but only 1.3% of the world's healthcare workers work here.
Healthcare workers in Africa earn some of the lowest wages globally. Brain drain fueled by emigration of experts seeking better opportunities abroad means the healthcare workforce has become scarce.
Data, the lifeblood of informed decision-making, is severely lacking in Africa compared to other regions. In 2019, the World Health Organization reported that only about 60% of African countries achieved at least 80% completeness and timeliness of their electronic health records. A mere 12 countries have conducted a national health survey in the past five years.
This data abyss makes it challenging for healthcare startups to accurately gauge market readiness for health-tech products and services. Nevertheless, within these challenges lie opportunities for innovation, strategic intervention, and a chance to reshape the narrative of healthcare in Africa.
Advancement and growth in Africa’s health tech industry
The room for growth in Africa’s health tech industry is exponential. In a region that’s home to nearly 1.2 billion people across 46 countries, innovative startups are uniquely positioned to address the challenges of the region.
Our own portfolio of healthtech startups has given us a first-hand taste of the depth of innovation in the sector. Regardless of current global economic conditions, a long-term approach that focuses on that innovative potential can lead to the emergence of sector-defining ventures.
Even if there is a pullback in VC funding in the short-term, committed investors, including our healthtech investment partners, understand that real growth and change will be achieved over the long haul. They will be able to maximise the value their investments produce and help startups focus on building their businesses.
Here are some interesting stats worth noting about financial trends in medical technology on the continent:
These financial stats reflect the resilience of Africa’s health tech industry, underscoring the sector’s immense potential for continued growth and transformative impact.
Now, let’s look briefly at the areas spearheading innovation and growth in the sector.
The success of telemedicine hinges on reducing hospital congestion, simplifying processes, and winning the trust of a populace accustomed to traditional health systems.
Today, new-age telemedicine solutions comprise technologies such as:
For instance, Mobihealth, a UK-based health tech company, pioneers accessibility by connecting patients to a global network of physicians for video consultations.
A lot has happened in supply chain management, with solutions improving efficiency across various distribution stages. Startups like MDaaS, for instance, are addressing last-mile delivery challenges, bringing affordable, quality care closer to underserved patients.
With public healthcare facilities remaining one of the most underfunded sectors in Sub-Saharan Africa, health tech startups are venturing into insurance solutions, providing innovative financial models.
Healthtech software companies like Reliance, mPharma, and Turaco attracted a significant chunk of the funding in the sector last year.
In a landscape where Africans often prefer to be their own doctors, health management apps and medical devices have become pivotal in empowering individuals to take charge of their well-being. Companies like Babylon Health (Rwanda) and Vezeeta (Egypt) champion health management apps, offering digital solutions ranging from online booking and appointments to comprehensive healthcare management.
From the transformative impact of telemedicine to the revolutionary strides in supply chain management, the health tech industry is shaping a future where healthcare accessibility, efficiency, and personal empowerment will be benefits available to everyone.
Africa, with its burgeoning population and the increasing penetration of internet use and mobile devices, is poised for a health revolution. The health tech industry beckons everyone to be a part of this game-changing narrative.
The potential is not just financial; it's the promise of empowering millions, breaking barriers, and pioneering accessible healthcare. To navigate the dynamic landscape of Africa’s health tech, you must work with a vision where your investments transcend profits, catalysing transformative healthcare solutions.
Join us at FFA in reshaping the future of healthcare experience in Africa. Become a healthcare visionary today!
