The Healthcare Industry is Evolving in These 5 African Countries...
- Last updated: October 16, 2024
The healthcare industry in Africa has long been snubbed by investors. And this is not entirely without reason: the odds have generally not been in the continent’s favor.
Case in point: Africa houses 14% of the world’s population, and yet has less than 1% of the world’s financial resources. Africa bears 25% of the global disease burden and yet has only 3% of the global medical workforce at its service, all with underdeveloped infrastructure – making investment in the industry difficult, to say the least.
So, what has changed?
The opportunities in the African healthcare industry
The pandemic and disruption of the global supply chain
COVID-19 has been a catalysing event for the revival of business interest in African healthcare. The disruption in global supply chains awakened this need to produce vaccines and other medical products locally.
Rapid urbanisation and increased life expectancy in Africa
Africa’s middle class is growing fast, and its countries are undergoing rapid urbanisation, making it less costly for investors to reach potential clients. In fact, Africa is growing so rapidly that it is expected that by 2030 – less than 6 years from now – 1 in 5 consumers will be from the continent.
This rapid urbanisation has also meant that people seek out access to healthcare, leading to a growing life expectancy – which, itself, represents a huge opportunity gap for investors.
Changing lifestyle & spread of non-communicable diseases
With urbanisation comes a change in lifestyle: more white-collar jobs lead to a sedentary lifestyle, and to more disposable income to spend on dining and entertainment… Non-communicable diseases like diabetes, and hypertension also spread in consequence, once again creating an opportunity gap.
Early stages of development and mature markets in Africa
Each African country has reached its own stage of development. Some African markets are more mature, and others are at an early stage, presenting the opportunity of becoming pioneers in the industry to investors.
Obstacles companies face when expanding in Africa
1. Lack of data sets
Data about health needs, and trends are rare in Africa. This makes it difficult for companies to accurately assess the market and create offers that would match the population’s needs. Unfortunately, the data that is available is often commissioned by private entities and so is unavailable publicly.
2. Foreign and complex regulatory environment
Regulatory compliance can be a maze in Africa: it’s easy to get lost and run into dead-ends there, especially in specialised industries like healthcare. As an investor, you won’t be certain what you are allowed to do legally, in terms of HealthTech for example, and what the regulations for certain substances are, among other things.
On top of this, you will have to maintain compliance with labour laws, fiscal regulations and more. To avoid these pitfalls, many companies choose to partner with an EOR in Africa. African EORs handle all responsibilities relative to onboarding, payroll, and compliance, among other things. They also do not require companies to have an in-country entity
5 African countries where the healthcare industry is growing (and worth investing in)
1. Morocco
The country’s population is growing steadily, with a significant portion of the population entering the age bracket that typically requires more healthcare services. This demographic shift translates into rising demand for healthcare facilities, medical services, and pharmaceutical products.
Government Support for Healthcare in Morocco
Any investors wanting to develop the Moroccan healthcare offer won’t be doing it alone: the Moroccan government has shown a strong commitment to improving healthcare infrastructure and services. Initiatives like the National Health Plan (Plan Santé 2025) are proof of that. They represent stability and long-term support for the healthcare sector, providing a safe environment for investment.
For instance, investors can capitalise on opportunities to participate in public-private partnerships (PPPs), on top of other investment avenues in healthcare.
Medical Tourism in Morocco
Morocco has emerged as a popular destination for medical tourism. Its convenient location and the quality and affordability of its medical services attract patients from nearby European, African, and Middle Eastern countries.
Investors can explore opportunities in the hospitality sector, specialised medical facilities, or healthcare services tailored to international patients.
Pharmaceutical Industry in Morocco
Morocco is one of the largest pharmaceutical markets in Africa, with a strong manufacturing ability and a favourable regulatory environment. In 2024, the pharmaceuticals market in Morocco is expected to achieve revenue of US$643 million.
Once again, its strategic location is advantageous, providing access to markets in Europe, Africa, and the Middle East.
Technological Advancements in Morocco
HealthTech such as telemedicine, electronic health records, and digital health solutions, is on the rise in Morocco. HealthTech can play a crucial role in improving healthcare delivery, enhancing patient outcomes, and increasing efficiency in the healthcare system. Investors can explore opportunities in healthcare IT, medical device manufacturing, and digital health startups that are driving innovation in the sector.
In 2024, the projected revenue in the Medical Technology market in Morocco is expected to reach US$753 million.
2. Nigeria
Population Density in Nigeria
Nigeria’s population exceeds 200 million inhabitants, making it the most populous African country. As the population booms, and as people live longer, the demand for healthcare services is also changing. There is a greater need to cater for non-communicable diseases like diabetes, as well as age-related illnesses, like Alzheimer’s.
Greater Healthcare Spending in Nigeria
As the Nigerian economy grows, so does its healthcare spending. From an individual perspective, it means that rising incomes and urbanisation are leading to increased spending on healthcare services and products.
From an institutional perspective, this means that the Nigerian government is also increasing its budget allocation to healthcare, reflecting a commitment to improving the sector. In 2023, for instance, the Nigerian government allocated the highest ever budget to the healthcare sector: over $15 billion. This alone offers ample opportunities for investors to tap into a market where demand is growing alongside with purchasing power.
Government Initiatives and Reforms in Nigeria
The Nigerian government has launched several initiatives to improve healthcare access and quality. These include the National Health Insurance Scheme (NHIS), which seeks to provide universal healthcare coverage, and the Basic Health Care Provision Fund (BHCPF), which aims to improve primary healthcare services across the country. These government-led initiatives open the doors to stable and long-term investments in the healthcare sector.
Chronic Disease Burden in Nigeria
Like many other developing countries, Nigeria is also experiencing a rising burden of non-communicable diseases such as diabetes, cardiovascular diseases, and cancer. Consequently, this trend is driving demand for specialised healthcare services, diagnostics, and pharmaceuticals. Here, investors have a unique opportunity to capitalise on these by being among the first to provide innovative solutions.
Medical Tourism Potential in Nigeria
Nigeria has the potential to become a medical tourism destination for neighbouring African countries. Already, the country boasts a few world-class hospitals and healthcare facilities that attract patients from other African countries. In 2022, the annual expenditure on medical tourism in Nigeria was already at $1 billion.
As such, investors have the opportunity to cater to these needs and to reach a larger market.
Healthcare Technology Innovation in Nigeria
Home to a booming tech industry, including FinTech and HealthTech, it’s no surprise now that Nigeria is witnessing a surge in healthcare technology innovation. Local startups are developing solutions to improve healthcare delivery, patient management, and health information systems. This includes telemedicine platforms, electronic health record systems, and mobile health applications.
3. South Africa
Well-Established Healthcare Infrastructure in South Africa
South Africa boasts a well-developed healthcare infrastructure with a mix of public and private healthcare facilities. Its network of hospitals, clinics, and medical centres cater to the diverse healthcare needs of its population, at the same time providing a solid foundation for investment and expansion opportunities.
High Disease Burden and Chronic Conditions in South Africa
South Africa faces a significant burden of disease, including communicable diseases such as HIV/AIDS, tuberculosis, and malaria, as well as an increasing prevalence of non-communicable diseases such as diabetes, cardiovascular diseases, and cancer. This creates a demand for specialised healthcare services, diagnostics, treatments, and pharmaceuticals, presenting investment opportunities for companies operating in these areas.
Healthcare Policy and Regulation in South Africa
South Africa has a robust regulatory framework governing the healthcare sector, providing stability and certainty for investors. The government has shown its commitment to improving healthcare access and quality through initiatives such as the National Health Insurance (NHI) scheme, which aims to provide universal healthcare coverage.
Additionally, the South African Health Products Regulatory Authority (SAHPRA) oversees the regulation of medicines, medical devices, and clinical trials, ensuring compliance with international standards.
Private Healthcare Sector in South Africa
South Africa has a strong private healthcare sector in addition to its public healthcare system. In fact, healthcare expenditure (up to $26 billion in 2022) is typically evenly split between private and public providers.
Private hospitals, clinics, and healthcare providers cater to individuals with private health insurance or the means to pay for healthcare services out of pocket. This offers investment opportunities in private healthcare facilities, medical technology, and healthcare services targeted at the affluent segment of the population.
Medical Tourism Potential in South Africa
South Africa has emerged as a medical tourism destination with a lot of potential. The country has the ability to attract patients from neighbouring countries as well as international medical tourists seeking high-quality and affordable healthcare services. The country’s advanced medical infrastructure, skilled healthcare professionals, and favourable exchange rates make it an attractive option for medical travellers.
As such, investors can capitalise on opportunities in the hospitality sector, specialised medical facilities, and healthcare services tailored to international patients.
Healthcare Technology and Innovation
South Africa is home to a vibrant healthcare technology and innovation ecosystem, with startups developing solutions to improve healthcare delivery, patient management, and health information systems. Investors can support and invest in these innovative companies to drive positive change and efficiency in the healthcare sector.
4. Egypt
Growing Population
Egypt’s population is large, exceeding 100 million people. These numbers are growing steadily, driving increased demand for healthcare services, facilities, and pharmaceutical products. This demographic trend presents a vast market for healthcare investment, with a significant portion of the population requiring access to quality healthcare.
Government Commitment to Healthcare in Egypt
The Egyptian government has shown its commitment to improving healthcare access and quality through various initiatives and reforms. For instance, the government has allocated significant resources – through initiatives such as the Health Sector Reform Program – to healthcare infrastructure, expanding coverage, and strengthening primary healthcare services.
Investment in Healthcare Infrastructure in Egypt
Egypt has been investing significantly in healthcare infrastructure, including the construction and renovation of hospitals, clinics, and healthcare centres. These investments are meant to improve healthcare access, particularly in underserved rural areas, and upgrade existing facilities to meet international standards.
As such, investors can capitalise on opportunities to participate in public-private partnerships (PPPs).
Egypt as a Medical Tourism Hub
Egypt has emerged as a leader in medical tourism across the Middle East and Africa regions. The country attracts patients from neighbouring countries as well as international medical tourists seeking high-quality healthcare services at lower prices. In fact, in 2022, the medical tourism industry in Egypt achieved revenues upward of $12.2 billion.
Egypt’s strategic location, medical facilities, and rich cultural heritage make it an attractive option for both medical travellers and for investors who can cater to the latter’s needs.
Thriving Pharmaceutical Industry in Egypt
It is no secret that Egypt has a well-established pharmaceutical industry – one of the largest in the Middle East and North Africa regions, in fact.
In 2023, Egypt’s pharmaceutical market ranked first in the Middle East and North Africa (MENA) region, with a $ 56.6 billion market value. Further ahead, the market is expected to witness a steady annual growth rate of 7.68%, which would create a market volume of US$1,948.00m by 2028.
Additionally, Egypt boasts a strategic location, which provides access to regional markets, offering opportunities for pharmaceutical companies to expand their operations and export products across the Middle East and Africa.
5. Kenya
Government Prioritisation of Healthcare
The Kenyan government has been prioritising healthcare, as evidenced by initiatives such as the Universal Health Coverage (UHC) program. UHC aims to ensure that all Kenyan citizens have access to quality healthcare services without suffering financial hardship. This commitment improves healthcare access and quality creates a supportive environment for investment in the healthcare sector.
Investment in Healthcare Infrastructure
Kenya has been investing in healthcare infrastructure to expand access to healthcare services, particularly in underserved rural areas. This includes the construction and renovation of hospitals, clinics, and healthcare centres. Investors can capitalise on opportunities to participate in public-private partnerships (PPPs) or invest in infrastructure projects that support the modernisation of the healthcare sector.
Medical Tourism Potential
Kenya has the potential to become a medical tourism destination, attracting patients from neighbouring countries as well as international medical tourists seeking high-quality and affordable healthcare services.
The country’s strategic location, diverse tourist attractions, and well-developed hospitality industry make it an attractive option for medical travellers. Investors can explore opportunities in the hospitality sector, specialised medical facilities, and healthcare services tailored to international patients.
Thriving Pharmaceutical Industry
Kenya has a growing pharmaceutical industry that serves both the domestic market and exports to neighbouring countries. The country has a strong regulatory framework for pharmaceuticals and a competitive advantage in generic drug manufacturing. Once again, Kenya’s strategic location within the East African region offers opportunities for pharmaceutical companies to expand their operations and export products to other regional markets.
Stay safe when expanding in the African healthcare industry
Africa HR Solutions has an expertise in helping companies like yours expand into the medical industry in Africa. We have already helped over 400 companies get established across 45+ African countries.
We understand the pitfalls and complexities of the healthcare industry better than anyone and can help you navigate it successfully through our EOR and PEO offers.
Ready to find out how we can help you achieve your business goals? Get in touch with us now.