African healthcare industry on surge

  • April 17, 2017

The healthcare is one of the fastest growing and developing industries in the world. It offers the patients with advice and services which treat them from preventive, rehabilitative, curative, and palliative diseases. Healthcare industry is divided into multiple areas. According to the international Standard Industrial Classification, the healthcare industry generally consists of healthcare services and facilities, medical devices, equipment, and hospital supplies manufacturers, medical insurance, medical services and managed care, and pharmaceuticals and related segments. It is one of the largest industry in the world, which has a direct influence over the quality of life of people in each country. Healthcare is one of the basic necessities of human beings.


Healthcare services and facilities includes hospitals, which provide medical, diagnostic and treatment services to the patients. This segment also includes nursing and residential care facilities. It is basically residential based healthcare services which includes home health care, nursing, medical supervision, facilities and supervision for handicaps, etc. The mobility services such as ambulatory services also comes under this segment. Ambulatory services are provided by hospitals as well as private service providers. This segment also includes medical practitioners, homeopaths, nutritionists, dietitians, dermatologists, physiotherapists, psychologists, etc. This segment covers the initial services offered by the healthcare industry.

Medical devices, equipment, and hospital supplies manufacturers. These are the companies which are the spearhead of the latest medical technology, offering their products across the whole spectrum of medical equipment, hospital supplies, products and services, including specialist applications. These equipment could be surgical instrument and medical instrument manufacturing, surgical appliances and supplies, dental equipment and supplies, ophthalmic goods, vital signs monitor manufacturing, mammography machine manufacturing, nebulizer manufacturing, hospital bed and hospital furniture manufacturing etc. This segment has its own significance. These medical equipment are used on daily basis in the healthcare industry and have the utmost importance in this segment. With the rapidly expanding healthcare industry, more and more number of such companies are sprouting up, to provide people with these medical instruments and equipment. According to R.B Farraday, the executive director of one of the leading medical equipment manufacturing firms in the UK, “medical equipment and instruments manufacturing companies are the backbone of healthcare industry. They support it with all the required equipment to serve the patients and the needy ones”.

Healthcare is one of the largest industries in the world, which has a direct influence over the quality of life of people in each country. Healthcare is one of the basic necessities of human beings.

Medical insurance, medical services and managed care: This segment comprises of all the medical insurance providing companies. The term managed care involves set of techniques, aiming to reduce the cost while providing quality health services to the patients. This segment further includes companies such as Health Maintenance Organizations (HMOs), preferred provider organizations, exclusive provider organizations, medicare, medical aid, healthcare consultants, medical Patient financing, healthcare staff recruitment agencies, health and medical insurance, surgical apparel manufacturing, medical supplies wholesaling, medical waste disposal services, dental insurance, medical couriers, medical device cleaning and recycling, medical claims processing services, pharmacy benefit management, corporate wellness services, home medical equipment rentals and medical case management services etc.

Pharmaceuticals and related segments: This industry develops, produces, and markets drugs and pharmaceuticals licensed for use as medications. Pharmaceuticals eradicate the need for inpatient and invasive care services. They are subject to a variety of laws and regulations regarding the patenting, testing and ensuring safety and efficacy and marketing of drugs. This sector further consists of many players including overthe- counter (OTC) drugs & drug stores, prescription drugs, biopharmaceutical drugs, generic drugs, pharmaceuticals packing & labeling services, dietary fiber supplement manufacturing, vitamin & supplements manufacturing, cough & cold medicine manufacturing, health stores and eye glasses & contact lens stores etc.

Healthcare industry in Africa

According to McKinsey & Company, the value of Africa’s pharmaceutical industry jumped to $20.8 billion in 2013 from just $4.7 billion a decade earlier. This growth is constantly progressing at a rapid pace and experts predict that the market will be worth $40 billion to $65 billion by 2020. This is indeed a good news for all the multinational companies and the companies associated with this industry. There would be a vast scope for business and growth opportunities in the coming years. It is also beneficial for patients, who didn’t have the access to medicines and treatment earlier as they will have the access to all the necessary medicines, along with the world class treatment. In the coming years, more and more number of investors and corporate houses would invest in the healthcare industry in Africa. It would not only be beneficial for continent’s economic growth, but would also prove to be a blessing for Africans, as it would not only provide them with quality healthcare services, but in turn would improve the lifestyle.

The driving forces

It is a well-known fact now that Africa’s healthcare industry is growing and expanding rapidly. The biggest and the obvious question is what are the driving forces behind healthcare industry’s growth? Some of the influencing factors are: Migration: It is one of the biggest factors, which determines the rapid growth of healthcare industry in Africa. Africa is witnessing a huge population shift. More and more number of people are shifting from villages and rural areas to the cities. According to a survey done, by 2025, two-fifths of economic growth will come from 30 cities of two million people or more; 22 of these cities will have GDP in excess of $20 billion. Cities provide the access to better lifestyle, in terms of employment opportunities, healthcare, education, safety, and security. The massive migration of people to cities is encouraging investors and corporate houses to open up new hospitals and provide people the access to world class medical facilities. According to Adowa, a local villager in the Ashanti region, Ghana “it is a trend for people to migrate to the cities. More and more number of young people are migrating to the cities to look for better employment prospects. Cities offer attractive lifestyle and opportunities”. This trend indeed is encouraging investors from across the globe to invest not only in healthcare industry, but also on the other industries such as education, apparel, food processing, hospitality, etc.

Growing appetite of healthcare industry:It wouldn’t be wrong to say that healthcare industry itself is one of the growth driving forces. According to a report published, Africa added 70,000 new hospital beds, 16,000 doctors, and 60,000 nurses between 2005 and 2012. With more and more number of people migrating to cities from villages, investors are stepping into joint ventures and partnerships to open up new hospitals. The growing number of hospitals and the other medical institutes is in turn affecting the healthcare industry in a positive manner, resulting in growth.

Favorable business environment:The African governments are trying to create more business friendly environment by controlling the prices and levying import restrictions, hence encouraging the domestic pharmaceutical and medicines manufacturing companies. Massive number of investors are looking to form joint ventures with the domestic African pharmaceutical companies to enter the African pharmaceutical market. It’s fueling the mutual growth of investors as well as the domestic drug manufacturing companies. Furthermore, the pharmacy chains are springing up, expanding their roots profoundly. People now have an easy access to quality medicines. Akwokwo, the owner of a pharmacy shop in Ghana says “the overall condition of healthcare industry in Africa is improving rapidly. This is a good sign for both people as well as for the development of the continent. Improved and quality healthcare amenities and has led to the decrease in mortality rate and death rate”.

Growth determining strategies

Africa is a continent full of hopes and business opportunities. People looking forward to invest here would certainly get the fruitful consequences. However, there are certain strategies which need to be kept in mind, to eliminate the possibilities of flunking. Adopting the right strategies will get you the desired results in terms of business growth and development. Some of the strategies are: Concentrate on the areas of opportunities- Africa is a vast continent. It’s not one big market, but 54 individual markets which differ from each other. Rather than concentrating on different countries, one should focus more on growing cities in the Africa. For instance Accra, the capital city of Ghana could be a suitable business destination, but Tema might not necessarily be a suitable destination for same business. African cities differ from each other in terms of population composition, political and economic conditions. An intelligent investor would target the cities where there is high scope of lucrative return, rather than concentrating on specific country. An analysis done by McKinsey company shows that 37 percent of African consumers are concentrated in 30 cities, which will have more consuming households than Australia and the Netherlands combined by 2025. These facts are sufficient enough to show the scattered growth regions in the vast continent.

Developing effective sales team- A good team is one of the key assets of company. It not only determines growth, but also makes sure that success is sustained, in addition to continuous progress. A good team should consist of qualified sales persons who would bring out more and more business opportunities. There should be local team members of each region. Team comprising of local people would help in getting the information and knowledge about the latest market trends. Local people act as a great source of knowledge and information which would in turn be beneficial for developing business strategies. The team should include a qualified management committee. An effective management committee would not only come up with growth oriented strategies, but would also be able to implement and execute those strategies.

Building up joint ventures & government partnerships- Many of the new investors and corporate houses prefer to build up joint ventures with the domestic companies or governments. This would not only provide a sense of security, but also give them the access to the domestic market, trends, demands, business regulatory environments. Partnering with government would also provide stability to the investors. Many of the African governments are promoting policies to encourage and support the domestic manufacturers. Establishing joint ventures and partnerships with these domestic manufacturers would give the investors the freedom to enjoy these polices framed by the government.

Forming the effective supply chain- Supply and distribution is still a big obstacle in many African cities. Effective business strategies, qualified team, in depth research and development would all be non-beneficial until and unless you’ve an effective supply and distribution chain. Very often the lead times are very long, which results in the delayed distribution. Associating with the local logistics companies would be a significant strategy to ensure the delivery within the committed time. Many investors and corporate houses are planning to set up the logistics company in the African countries. It would subsequently be fruitful for other companies as it would facilitate the swift movement of goods and services.

Africa is probably the last destination where higher growth opportunities are still available. Africa offers endless business opportunities, where lucrative returns are available. African healthcare industry offers attractive growth opportunities where potential investors could gain huge profits, while expanding their business. Moreover, the African healthcare industry is expected to grow at a significant pace and it offers the endless growth possibilities. Now is the right time to invest so that the fruits of hard work could be reaped in the coming years.

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