Read the Conversation
Meeting highlights:
- IFC's priorities in Africa: Supporting private business development across the region in different areas, such as financial services, digital infrastructure, agribusiness, and healthcare.
- IFC’s investment in health in Africa: 15% of the total portfolio (as of June 2024), around $4.7 billion, invested in health for Africa, to date / Impacting on higher productivity and wellbeing.
- IFC is building public-private partnerships across the region to guarantee local knowledge and address the main health gaps through a collaborative effort.
- IFC's priority markets and sectors of health: Investing in the development of vaccines, pharmaceuticals, MedTech, consumable manufacturing, and healthcare centres in Nigeria, Morocco, Senegal, DRC, Ruanda, South Africa, Kenya, Cote d'Ivoire, among others.
- IFC is a partner of choice for Africa's health ecosystem: in-depth knowledge of the region's market dynamics, cultural differences, and regulatory frameworks to promote sustainable investments.
- Technology transforming health dynamics: technologies accelerating healthcare innovation and reach of rural areas / 692 million mobile subscribers in Sub-Saharan Africa.
- "Africa is the Future": highest percentage of youth, growth in demand, young markets for new technologies and innovation, untapped opportunities.
EF: What are IFC's strategic priorities for Africa, and how do healthcare investments translate into your priorities?
DK: IFC has several priorities, with investments spanning multiple industries, including agribusiness, financial services, digital infrastructure, manufacturing, and industrialization. We are committed to supporting business growth and private sector development across these sectors. In Africa, key opportunities lie in areas like agriculture, financial services, and healthcare, which is also a primary focus for us. Healthcare, in particular, is essential across the continent, especially as population growth and economic development lead to longer life expectancies. This progress has brought more complex disease profiles that require comprehensive healthcare solutions. Our work in healthcare, therefore, enables people and communities to thrive, increasing productivity and improving wellbeing. The COVID-19 pandemic further highlighted the importance of healthcare. Even though the numbers were not so high in Africa, the ripple effects from other regions showed how vital it is to focus on communicable and non-communicable diseases. Healthcare, in all its aspects, is a significant part of our strategy in Africa.
EF: Which African countries are becoming increasingly attractive to investment, especially in healthcare?
DK: Healthcare is important in every country, and we have made significant efforts across various areas like pharmaceuticals, vaccines, healthcare centres, and diagnostic centres. We are focused on doing more in these areas. We have been very active in Nigeria and other African markets including South Africa, Kenya, Egypt, Morocco, Senegal, and Ghana. Ethiopia and Rwanda are also key markets for us in Africa. We look for opportunities where we can make the biggest impact. Beyond investments, we also work on capacity building and partner with governments to improve regulatory environments that help create an overall stronger healthcare sector.
EF: How do you identify these opportunities in different sectors, and what trends do you see?
DK: We conduct extensive analyses in different countries to provide a clear understanding of each country’s strengths, weaknesses, and opportunities, enabling us to drive meaningful progress. With these tools, we engage with policymakers and the private sector, combining our analytics with our market knowledge to identify where we can support private sector growth in various sectors. We use this approach in healthcare as well. We analyse the industry's size and track trends like the rise of telemedicine, health tech, pharmaceuticals, and vaccines across Africa. We also monitor the emergence of certain disease profiles to understand each region or country’s capacity to effectively address health challenges. By following and analysing these trends, we spot gaps and opportunities that could be replicated in other countries. We also collaborate with policymakers to support private sector development. Public-private partnerships (PPPs) are a strong focus for IFC across multiple sectors, particularly in healthcare, as they enable us to bring private-sector solutions to enhance government healthcare services.
EF: Can you share any initiatives or projects on how to build self-sufficient infrastructure and develop PPPs in Africa?
DK: Our healthcare investment portfolio makes up about 15% of our total committed investments in Africa, amounting to around $4.7 billion. This shows our strong commitment to the sector. We’re involved in supporting vaccine manufacturing in South Africa and Senegal, and pharmaceuticals in countries like Côte d'Ivoire, Egypt, Kenya, South Africa, Uganda, and Nigeria. We’re also supporting the development of primary healthcare centres, hospitals, and diagnostic centres in Ghana, Nigeria, Côte d’Ivoire, Kenya, South Africa, Egypt, and Angola. We’re also investing in healthcare consumables, and we recently supported such a project in Kenya. Our most recent gap analysis assessed the health sector maturity of 10 African countries—Côte d'Ivoire, Ghana, Nigeria, Morocco, Senegal, Democratic Republic of Congo, Kenya, Uganda, Rwanda, and South Africa.
Our strategy enables us to focus on four main healthcare subsectors: vaccine manufacturing, pharmaceuticals manufacturing, MedTech and consumables manufacturing, and the provision of diagnostics and healthcare services. For example, in Nigeria, we invested in Evercare Hospital and the AfyA Care Group. In Ghana, we invested in Accra Medical Centre and Nyaho Medical Centre. We are working with Fidson Healthcare Plc, one of Nigeria's leading pharmaceutical companies, to boost API production. These are just a few examples of our significant efforts to support healthcare in Africa within our key markets.
EF: What key factors should investors consider when navigating the challenges and opportunities in Africa and emerging healthcare markets?
DK: Our goal is not just to move in solo and support a company, although we do that. We aim to mobilize investors by creating a demonstration effect to encourage more investors to enter a sector. When larger investments are needed, we don’t fund the entire amount ourselves; instead, we bring in other investors. This approach aligns with our core mandate as a development finance institution. Many investors look to IFC for our strong market analysis, deep local knowledge, extensive network with businesses, and collaborative approach to enhancing project bankability. This, in turn, attracts global investors to African markets. Africa is a truly diverse continent and understanding these unique dynamics, especially within the healthcare sector, is critical. Collaborating with a partner who understands these nuances across markets and sectors is an important component. Investors need to conduct thorough market research and understand the distinct characteristics of each country's regulatory environment, healthcare infrastructure, and cultural dynamics—all of which are important to make an informed investment decision.
IFC is a valuable partner in this process. Investors need to build on strong local partnerships, oftentimes engaging with the government to understand the regulatory environment and needs and understand the landscape of local private sector players within the health sector. Investors must also focus on sustainability, aiming for long-term commitments that address current and future needs. Understanding the sector's drivers, such as technology trends, is important to prioritize and enter a market successfully. Collaboration is critical in any ecosystem, especially in healthcare, given its diversity. Key stakeholders include governments, local and international private sector players, regulatory authorities, and financial investors like banks. Other valuable partners include NGOs and relief agencies, which often play vital roles in healthcare and nutrition which are closely linked. Global platforms like UNICEF, GAVI, WHO, and the Global Fund are essential contributors to the ecosystem as they help shape a comprehensive understanding of the healthcare landscape.
EF: How do you see this health transformation with digital technologies revolutionizing the sector? How do you see this being adopted into Africa, and what is the potential for emerging markets? How is it going to change the dynamic of investing in health?
DK: We are seeing a transformation in healthcare. Traditionally, healthcare has been about managing communicable versus non-communicable diseases. However, with the rise of non-communicable diseases due to lifestyle factors, rethinking healthcare is essential. Diseases like malaria, cholera, or Ebola trigger government or public sector responses. However, non-communicable diseases, such as diabetes and cardiovascular conditions, require different approaches. Digital transformation is revolutionizing healthcare globally, and Africa is part of this shift. Bridging infrastructure and access gaps is key to ensuring quality healthcare during this digital transition. According to the Global System for Mobile Communications Association (GSMA) report, by 2030, 692 million unique mobile subscribers will exist in Sub-Saharan Africa, which paves the way for health tech innovations like virtual care, AI-assisted radiology, and cloud-based diagnostics. This could enable Africa to leapfrog in healthcare access and affordability.
Technologies are accelerating healthcare advancements, especially in hard-to-reach rural and semi-urban areas. Mobile health platforms allow patients to access consultations, diagnostics, and healthcare education through their phones, which expands healthcare access. In 2020, IFC launched its TechEmerge Health East Africa program to bring cutting-edge technology to healthcare providers. This initiative has matched 16 global health tech companies with 15 private hospitals, primary care clinics, and laboratories in Kenya, Uganda, and Ethiopia, benefiting 400,000 patients annually. The power of digital transformation is a real game-changer. Venture capital needs to recognize the enormous potential of health tech in Africa in improving healthcare access on the continent. Africa is the youngest and fastest-growing continent, and healthcare, especially health tech, is a key enabler for growth due to its propensity to scale. However, only about 9% of venture capital investments in 2023 went to Africa. There is a huge upside potential; venture capitalists should move quickly to tap into these opportunities.
EF: What would you say to other investors, venture capitalists, and people looking to expand their investment portfolios? Why is it beneficial to invest in Africa?
DK: My main thought is that Africa is the future. It is the youngest continent on Earth, with the highest percentage of youth, which translates into the highest growth in demand and consumption. So, if anyone is seeking growth potential, there may be other opportunities, but none as full of potential as Africa. Investing in Africa's healthcare sector offers a unique opportunity for significant impact and potential returns. Despite Africa's diversity, 54 countries with distinct economic systems, cultures, and needs, the common thread is the tremendous growth and drive for technology, and for upward mobility. Africa's evolving healthcare landscape presents unique opportunities to improve access and outcomes, as the sector undergoes significant transformation to better meet the needs of its people. Health tech is driving innovation, offering Africa the opportunity to leapfrog traditional methods and adopt transformative solutions that directly benefit communities, reaching consumers in impactful, new ways.
Investing in Africa's healthcare sector by global investors can contribute to addressing critical needs while tapping into significant growth potential. However, success requires adopting nuanced and adaptable strategies that reflect the unique characteristics of each country or region. Partnerships with businesses and institutions like IFC are essential for understanding and navigating these local nuances. IFC's approach emphasizes tailored engagement, and strategic partnerships and collaborations to unlock the potential in each market. In conclusion, investing in Africa's healthcare is about creating a long-term meaningful impact on millions of lives, helping to build a more resilient and equitable healthcare system, while contributing to sustainable development. In the end, sustainability isn't just the right thing to do; it is the only smart thing to do.
