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Healthcare.9.Thmb.jpg Huge opportunities await Indian health investors in Africa

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Saroj Mohanty | 18 Mar, 2014
At the just concluded 10th CII-EXIM Bank Conclave on India-Africa project partnership, the High Commissioner of Nigeria, Ndubuisi Amaku, gave an interesting bit of information. He said Nigerians last year spent around $350 million to access healthcare in India.

Speaking on the sidelines of the meet, he said the amount was spent by just about one percent of the Nigerian population who could afford to pay for quality healthcare in India.

Amaku asked Indian entrepreneurs to consider investing in facilities in Nigeria to provide healthcare to patients who may find it difficult to travel to India due to the high airfare and other logistics issues.

The data furnished by the High Commissioner indicates the huge healthcare market that is waiting to be tapped by Indian healthcare providers and drug manufacturers. According to the World Health Organisation (WHO), the Sub-Saharan region alone accounts for 11 percent of the world's population and yet bears 24 percent of the global disease burden, and commands less than one percent of global health expenditure.

The challenges African health systems face are structural: poor infrastructure, inadequate government funding, a shortage of healthcare workers and a lack of capacity in the existing workforce that lead to morbidity and mortality from eminently treatable conditions.

Sector experts say an emerging middle class, rising disease burden, especially non-communicable diseases (NCDs) such as cardiovascular and respiratory disorders, cancer and diabetes, provide huge opportunities for drugs and diagnostic equipment and services.

WHO estimates that by 2020 the biggest increases in NCD deaths will occur in Africa.

An IMS Health report titled "Africa: A ripe opportunity," reveals that by 2020, the market could represent a $45 billion opportunity for drug makers, spurred in part by robust economic growth and demographic changes.

With the recent telecommunications boom, new areas of business like e-health and m-health are also emerging in the continent.

The International Finance Corporation (IFC), an arm of the World Bank group, in a recent report said the healthcare industry is set for huge growth, as Sub-Saharan Africa's market, including Nigeria, is estimated to touch $35 billion by 2016.

In the report titled "The Business of Health in Africa", the IFC says the growth will increasingly result in massive opportunities for people involved in the healthcare industry and that the demand in hospital equipment, medical devices and pharmaceuticals is stepping up. This will result in better quality health services and improved access to medicare across the region.

"Healthcare provision accounts for half the investment opportunity, with the remainder split across distribution and retail, pharmaceutical and medical product manufacturing, insurance and medical education. These investments will fund capacity expansion, new businesses and renovation of existing assets."

Both India and Africa have not been able to eliminate communicable diseases like malaria and are burdened with NCDs. The similarities provide various opportunities across the value chain. As Africans grapple with various diseases, they would increasingly buy cheap generic drugs from India.

Médecins Sans Frontières claims that treating a single patient for a year in South Africa with the patented Novartis drug costs $33,896, which is a horrifying 259 times more expensive than the cheapest Indian generic equivalent.

In 2012, Africa accounted for almost a quarter of India's drug exports.

At the first African Pharmaceutical Summit, held in September last year in Hammamet, Tunisia, experts said that Africa, with a compound annual growth rate (CAGR) of more than 10 percent, is the second most dynamic pharmaceutical market after the Asia-Pacific region.

"Although the African pharmaceutical market represents only two percent in global terms, it is the fastest-growing in the world," says Mthuli Ncube, chief economist and vice-president at the African Development Bank (AfDB).

"There is a window of opportunity considering the strong demographic dynamics, the growth of the consumer spending power in Africa, although the continent accounts for the bulk of the global infectious disease burden."

Also, the climate for private sector health investment in Africa has never been better as it is now. Reports indicate a growing "political momentum" in the development of the sector. Tunisian Health Minister Abdellatif Mekki has called for public-private partnerships in this emerging economic area. He says that such partnerships would significantly improve access to medicine and harmonization of laws in Africa.

"New business models and partnerships applicable to Africa should be designed to better meet the specificity of the continent," says Feng Zhao, manager of the health division of the AfDB's human capital development department.

Some point to innovative delivery models like India's Aravind Eye Clinic, which has a flexible pricing system based on a patient's ability to pay to remain profitable, while providing free eye care to patients who cannot afford it.
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