Africa sees a $1.3 billion increase in healthcare investments

Africa’s healthcare faces many problems, ranging from inadequate infrastructure to a shortage of funding, but technology is changing healthcare delivery in the continent.

It is critical that Africa’s rapidly expanding young population, which is expected to be the world’s largest workforce by 2040, has access to high-quality healthcare in order to reap the rewards of this generational dividend.

For prospective buyers, these challenges offer a plethora of business opportunities. In Africa, the private sector is becoming increasingly significant in funding healthcare.

The healthcare sector in Sub-Saharan Africa has grown significantly in the last two decades, according to an AVCA survey. Between 2015 and 2020, 97 private equity (PE) and venture capitalist (VC) investments totaling US$1.3 billion were made in Africa’s healthcare sector.

Nigeria, Morocco, Egypt, South Africa, and Ghana are the top five countries in terms of the number of PE and VC fund contributions in healthcare in Africa between 2015 and 2020. Deals in the healthcare market accounted for 8% of overall transaction value in 2019 and 2020, demonstrating investors’ continuing commitment to closing the continent’s healthcare gap.

In 2020, Africa’s share of total reported deal value rose to 16% of total reported deal value, up from 3% in 2019. The overall amount of final closed PE & VC funds in Africa between 2015 and 2020 was US$18.1 billion. Half of this came from funds with healthcare as a focused industry in their investment mandate.

Nearly half of all healthcare in Sub-Saharan Africa is provided by the private sector, and nearly 60% of the continent’s healthcare funding is provided by private sources.

When asked why healthcare investment is growing in Africa, Ugo Iwuchukwu, Brands and contact manager at Helium Health, said, “The situation with the latest investments into African healthcare is a melting pot of a lot of things.” For starters, it was unavoidable. Healthcare is an industry that concerns everybody, and it lags behind contemporary sectors like banking and even telecommunications in terms of technological advancement. Consider how you can make almost any trade online, but you can not do any healthcare operation online. As a result, it has always been a position where value could be added by all stakeholders.

“Second, the pandemic unintentionally shone a spotlight on the state of global healthcare, demonstrating what people like Helium have been saying: there is a lot of work to be done to develop not only Nigeria, but the whole global healthcare sector. As a result, what was already simmering prior to the pandemic gains traction.”

As more players come on board and technology is gradually being used to solve numerous healthcare issues around the continent, digital technology is becoming more prevalent in Africa’s healthcare market.

While investment in the healthtech sector is still in its infancy relative to other sectors such as fintech, the race has obviously started, and it will only be a matter of time before we see the fintech sector’s progress mirrored in healthcare across Africa.

Nigeria gets $18.2m from Japan to boost the health-care system

The Minister of State for Budget and National Planning, Mr. Clem Agba announced that Nigeria has obtained a $18.2 million grant from Japan to improve its health sector. During his visit to the University of Benin Teaching Hospital (UBTH), he disclosed this knowledge.

He claimed that his visit was to evaluate the utilization of the N49 billion investment fund allocated by the federal government to 52 federal health institutions in the region, disclosing that the Japanese assistance will take the form of medical equipment and capacity building for medical staff.

According to the Minister, this assistance is made possible by President Muhammadu Buhari’s 2019 visit to the Japanese Prime Minister.

Mr Clem Agba said, “I just wanted to let you know that the Irrua Specialist Hospital and the UBTH, both in Edo, are among the seven beneficiaries of this grant.

“We also collaborate with USAID, and I signed agreements with them in which they provided us with 200 ventilators, of which I am aware that Irrua Specialist Hospital received three and the UBTH received three from the 200 ventilators that we distributed across the country,” he added.

The Minister stated that one of the COVID-19 revelations was the weakness of the Nigerian health system, which is why the FG graciously approved the N49 billion investment fund for 52 federal medical centers and teaching hospitals across the country.

He clarified that the fund was intended to help develop facilities in the sector in order to maintain the country’s health system’s stability.

Agba stated that the funds were set aside for the construction of molecular laboratories, as well as the provision of a minimum of ten bedded Intensive Care Units (ICU); isolation center appliances and Personal Protective Equipment (PPEs); among others, in the 52 health establishments.

“This meant that each of the centers received approximately N950 million to buy the required facilities; as well as PPE for their labs, isolation centers, and ICUs,” he added.

AU, J&J Sign Deal for 400 Million Doses of Covid-19 Vaccines

Johnson & Johnson, an American pharmaceutical company, has announced that it will begin supplying the African Union (AU) with 400 million doses of its single-shot Covid-19 vaccine in the third quarter.

According to a related announcement, all African Union member states will have access to 220 million doses of the Johnson & Johnson single-shot Covid-19 vaccine through the African Vaccine Acquisition Trust (AVAT), which was formed in November 2020.

According to a joint statement released by the African Union, the African Vaccine Acquisition Task Team (AVATT), the African Export-Import Bank (Afreximbank), the Africa Centres for Disease Control and Prevention (Africa CDC), and the Africa Medical Supplies Platform (AMSP), an extra 180 million doses may be requested.

Africa CDC Director, Dr. John Nkengasong, said: “The Africa CDC proposed to the African Union that a minimum of 750 million Africans (60 percent) be immunized if Covid-19 is to be contained. This exchange helps Africa to reach approximately half of the goal. The main feature of this vaccine is that it is a single-dose vaccine, making it easy to roll out rapidly and safely, saving lives.”

President of South Africa, AU Champion for the Covid-19 vaccine plan and purchase, and Chairman of AVATT, Cyril Ramaphosa, accepted the landmark deal, which he initiated jointly with the corporation during his term as AU Chairperson.

“This agreement is a big step toward ensuring the health of all Africans. It is also a strong example of African unity and what we can do by collaboration between the public, private, and foreign sectors that prioritize citizens,” Ramaphosa said.

The vast majority of supplies will be manufactured at Aspen Pharma’s massive pharmaceutical processing facility in South Africa.

Afreximbank President Benedict Oramah stated, “We are extremely honored to have been offered the chance by the African Union to promote this significant transaction under the auspices of the Africa Vaccine Acquisition Task(AVATT) Team in the middle of a very tight Covid-19 vaccine market.”

“We look forward to beginning the implementation of the US$2 billion Vaccine Procurement facility approved by the Bank’s Board of Directors to assist the continent in beginning to rid itself of the pandemic and restore its economy as Financial and Transaction Consultants, Guarantors, Installment Payment Facility Arrangers, and Payment Officers.”

Oramah stated that the money would help intra-African trade and that “we have already begun engagement with our financial partners” to obtain additional funding to support procurement if Africa agrees to purchase the additional 180 million doses.

AU countries were invited to place pre-orders for the vaccines prior to the signing of the deal, and “many countries expressed strong preference for this particular vaccine. The majority of countries have already finished their pre-orders,” reads the statement.

Global investors are planning to plug Nigeria’s $82 billion health deficit

In Africa’s largest country, the coronavirus pandemic has sharpened the spotlight on a health-care investment deficit and international investors are attempting to fill the gap.

African health-care assets had started to build concern more widely, long before the pandemic. In November 2019, the World Bank’s International Finance Corporation joined with the Investment Fund for Health in Africa-II (IFHA-II) to form a $115 million purchase platform for healthcare provider providers in the east and south of the continent.

After the advent of the pandemic, 100 billion naira ($254.6 million) have been released by the Nigerian government in state credit facilities for healthcare, from pharmaceutical firms and suppliers of drugs to service providers, which has evidently sparked greater demand from private investors. A further 50 billion naira is supplied by the Bank of Business, a Nigerian infrastructure finance agency.

“The construction of world-class healthcare facilities across Africa, but particularly in Nigeria, is a very compelling opportunity,” said Hafeez Giwa, managing partner at HC Capital Properties, which has started to invest in health-care assets in Nigeria.

Another potential was outlined by Tosin Runsewe, CEO of healthcare investment company AfyACare Nigeria: mandatory health benefits for federal workers would decrease insurance premiums and the amount of healthcare costs covered could increase to between 20 percent and 30 percent by 2030.

The Knight Frank study emphasised that, as it is, about 72 percent of household health care spending is out-of-pocket, relative to the sub-Saharan average of 35 percent, and just 5 percent of health care is provided by insurance.

Runsewe said, “The cost of this treatment could be met by a health insurance premium of just around 20,000 Naira ($50) per year, half of the current average cost, if we were able to reach a critical mass of 40 million to 60 million Nigerians covered by healthcare.”

“In private primary health centres, there are a number of ways for investors to provide coverage at an affordable cost.”

Due to both “extreme need” and government policies that have made it easier to grow high-quality assets that provide affordable care, Giwa said HC Capital Properties was investing in Nigeria. He indicated that these prospects are actually being pursued by two forms of investors.

Giwa said, “In the one hand, there are local foreign investors and local pension funds who, in the case of Nigeria, are investors in Naira and have no currency risk concerns.” “On the other hand, companies and institutions are intrigued about the possibility of offering high-quality healthcare to Nigerians with lower and middle incomes.”

He believes the pandemic to have led to a “permanent change in thinking” that would bring more emphasis on better health care at home. According to a recent PwC survey, Nigeria currently loses up to $1 billion per year to outbound health tourism among wealthy Nigerians due to insufficient domestic access.

Kenya Airways Unveils Ultra-modern Pharma Facility

Kenya Airways (KQ) has unveiled a state-of-the-art pharma facility at Jomo Kenyatta International Airport (JKIA) through its cargo arm KQ Cargo to help meet demand for medical shipments around the world.

According to Dick Murianki, KQ Cargo Manager, the immediate aim of the facility would be to boost logistics for the delivery of a possible COVID-19 vaccine in Africa.

Mr. Murianki says “KQ Cargo has worked closely with pharmaceutical and medical customers to ensure that they are able to safely and effectively meet their vaccine transport needs to travel efficiently once the vaccine has been licenced by the regulators.”

“Although coinciding with the COVID-19 pandemic, investment in the pharmaceutical facility will help meet the global demand for pharmaceutical products in preparation for the big task of transporting medications, vaccines, blood samples and temperature-sensitive cargo by providing an end-to-end cold chain logistics solution,” he added.

Since March of this year the national carrier has been transporting essential goods and medical supplies, some 6,000 tonnes of much-needed medical equipment to help tackle the COVID-19 pandemic.

Jomo Kenyatta International Airport (JKIA) in Nairobi was a distribution and logistics hub in Africa and was ranked by ACI as the second fastest-growing cargo airport in the world in 2019.

KQ has also joined forces with global leaders in cold chain technologies to deliver active and passive packaging with dedicated equipment for streamlined cold chain operations.