Healthcare firms in Africa are facing a bright future, the African Union said in a new report released in Nairobi on Tuesday.
According to the report by the AU’s Development Agency — New Partnership for Africa’s Development (AUDA-NEPAD), although local healthcare startups in Africa still have obstacles to overcome, there are signs of significant changes afoot that could alter the business environment for entrepreneurs on the continent.
“Everything from real gains in expertise, new markets opening up, creative funding and investment schemes, to credible attempts to tear down regulatory barriers are moving in the direction of healthcare entrepreneurs,” says the joint publication by AUDA-NEPAD and Boston Consulting Group on barriers to healthcare entrepreneurship in Africa.
The findings indicate that Africa’s healthcare businesses are mushrooming in ways that would have been difficult to imagine just a decade or so ago.
“Ideally, these trends will accelerate further so more and more entrepreneurs can take advantage of the opportunity,” says the report.
The report notes that Africa’s healthcare businesses span the entire spectrum of the sector and are emerging in and beyond the traditional innovation hubs across the continent.
It shows that the traditional sources of funding, such as banks, shy away from healthcare in Africa because the sector as a whole is handicapped by long product and service adoption cycles, which often require navigating red tape to gain regulatory approval.
The report indicates that in order to overcome the limits on African healthcare entrepreneurship, a more mature business ecosystem is necessary and the formidable barriers to growth must be eliminated.
The report notes that increased access to early-stage and blended financing could help to unlock African healthcare entrepreneurship.