The Covid-19 pandemic and the recent freeze on US aid have exposed the vulnerability of Africa’s healthcare systems but also created the momentum for locally made healthcare solutions, an early stage impact investor in the sector says.
- •President Donald Trump’s recent USAID and international aid freezes are likely to affect the fight against HIV and other illnesses, as many interventions against the pandemic were funded by the US President’s Emergency Plan for AIDS Relief (PEPFAR) and other aid programs.
- •The COVID-19 pandemic also showed the vulnerability of the continent’s warning and response systems, forcing local healthcare systems to be largely dependent on external solutions such as vaccines.
- •In Africa, healthtech tends to trail its peers in fintech, mobility, e-commerce, and others in raising funding and creating profitable exit opportunities for founders.
“Covid-19 was a wake up call and we now have USAID freeze which is another wake up call. Basically what we are being told is to own our healthcare system as opposed to living it to donors and aid, we need locally made solutions. This is an opportune moment that we need to start building up,” Wilfred Njagi, Co-founder and CEO of Villgro Africa, an emerging healthcare businesses incubator and impact investor, says in an interview with The Kenyan Wall Street.
According to Njagi, the continent is basking in emerging healthtech solutions not only capable of addressing the continent’s needs but also being profitable enough to offer founders better exit options.
“When we launched the first calls for health innovations, only a handful of applications would be received. Today the landscape is significantly different, we receive more than 1000 applications annually from all across the continent,” he notes.
Villigro has deployed $4 million in catalytic funding, and leveraged over $44 million in follow-on investment. Its portfolio companies have generated over $36 million in collective revenue.
“There is problem with scalability, traced to overregulation, talent mismatch, scarcity of tailored resources and the fragmented nature of the African market.”
Opportunity, Fragmentation
Some of the social impact solutions across the continent include, benacare, care360, dawa mkononi, ilara health, jiji health, lucy enset, and Photo-Kabada.
Benacare, for instance, is creating a community centered, patient-focused model that bridges the facility-level care with home based continuous care. The approach has improved healthcare outcomes, providing affordable care for chronic conditions delivered in the comfort of patients’ homes.
In Uganda, Photo Kabada’s hybrid remotely monitored machine is making neonatal phototherapy for newborns with jaundice accessible and affordable. The hybrid power system also ensures the device remains operational during power outages, reducing reliance on inconsistent power supply.
“Instead of spending time in building businesses, the startups waste between 1-2 years trying to raise funds. The fragmentation of African markets is not making it any better with an implication of getting standalone approvals in the 54 countries, making it harder for cross-boarder roll-out of these solutions,” he added.
“To support these solutions and many other homegrown alternatives, corporates such as manufacturers and banks needs to start setting aside funds in their CSR budgets towards building a robust healthcare ecosystem, health is directly linked to their businesses also,” he added.
Healthtech tends to trail its peers in fintech, mobility, e-commerce, and others in raising funding and creating profitable exit opportunities. There have been several recent positive trends, such as the 2023 US$684mn acquisition of Tunisia-founded InstaDeep by Nasdaq-listed German biotech company BioNTech SE.
