Africa's healthcare is in the midst of an innovation revolution that, as PwC say, "…is transforming Africa's economic potential, creating new target markets and unprecedented consumer choice".

This innovation revolution is powered in part by traditional methods of funding human capital development in areas such as development and growth of infrastructure, education, science and technology, as well as increasing access to digital, mobile, and wireless technology.

By targeting investment into human capital development and implementing innovative policies to shape the life sciences sector, Africa is well positioned to realise its innovation potential.

Gowling WLG's experts look at some of the innovation practices driving development of the healthcare and pharmaceutical sector in Sub-Saharan Africa.

The wisdom of convention

The conventional wisdom is that innovative potential is linked to research and development (R&D) funding. In 2013, the UNESCO Institute for Statistics (UIS) reported that global spending on R&D had reached a record high of approximately US$ 1.7 trillion with many countries committed to increasing both public and private sector R&D spending by 2030.

In 2007, the African Union sought a commitment from its members to invest at least 1% of their GDP into R&D for "an innovation-led knowledge-based economy" by 2020.

By 2013, countries such as Malawi, Uganda and South Africa were reported to be contributing approximately 1% of national GDP into their national research programmes. In 2016, the Global Innovation Index reported that Kenya, Rwanda, Uganda, to name but a few countries, were granted the status of "innovation achievers" on the basis of having achieved "at least 10% higher than their peers for their level of GDP" invested in the knowledge and technology sectors in four out of the last five years. Indeed, from the 17 global economies identified as "innovation achievers", more than half the countries recognised were from Sub-Saharan Africa.

While increasing R&D investment is a benefit, to capitalise on the products of such R&D investment requires expertise, familiarity with technology, capacity and the infrastructure in which to do so. It is therefore no surprise that these "innovation achiever" countries are some of the largest recipients of government expenditure on education per pupil in Sub-Saharan Africa. But beyond that, these countries have also implemented innovative policies to shape the development of their national healthcare and life science sectors to better exploit the benefits of their knowledge-based economies.

Innovative plan for life sciences in Africa

The East African Community of countries has been an early adopter of innovative policies such as the African Union's Pharmaceutical Manufacturing Plan for Africa (PMPA) and the New Partnership for Africa's Development (NEPAD) initiative, titled Strengthening Pharmaceutical Innovation in Africa. The latter proposes a framework by which the development of pharmaceutical innovation in Africa is dependent on establishing the following:

  1. political stability;
  2. an infrastructure of roads, power and water supply; and
  3. a functioning banking and economic sector.

In addition to the above requirements, pharmaceutical innovation is dependent on decision makers buying into the initiative and staying committed to a process of innovation that requires social, academic, legislative, economic and political engagement over several years and potentially across multiple governments.

The current innovation landscape

In 2017, the Disrupt Africa Tech Start-ups Funding Report 2016 reported on the "existence of roughly 200 African innovation hubs, 3,500 new tech related ventures and $1 billion in venture capital to a pan-African movement of start-up entrepreneurs."

Kenya, an early adopter of investment in the tech and health sectors, has seen an increase in opportunities resulting from increased R&D funding. Between 2007 and 2010, the information communications technology sector (ICT) witnessed rapid growth in Kenya, resulting in the phrase 'silicon savannah' being coined to describe the concentration of established, and start-up, tech companies clustered around Nairobi, Kenya.

Successful start-ups include businesses such as M-Pesa: an 'alternative' virtual currency - which allows individuals to purchase the virtual currency with real money and exchange currency back and forth by sms messaging - has been adopted for the purchase of health insurance. Whereas the traditional means of purchasing health insurance requires a bank and a personal account, now, individuals are able to bypass banks and bank accounts and instead purchase insurance premiums by digital currency.

One key driver of such innovation has been the availability and uptake of mobile telephony and internet access. Sub-Saharan Africa has a population of approximately 800 million people, of which, 60%, or 480 million people, have access to mobile phones.

Modern technological innovation also has its place in dealing with healthcare issues in the present. UNICEF and the Government of Malawi recently launched Africa's first drone air corridor to test the humanitarian use of drone vehicles for:

  • generating aerial imagery during humanitarian crises;
  • using drones to extend the scope of coverage for Wi-Fi connectivity during emergencies; and
  • delivery of low weight emergency medical supplies, vaccines etc.

This initiative has created significant interest in a number of companies, universities and NGOs around the world and could prove to be a useful tool to dramatically improve disaster management and humanitarian crisis handling, globally. The air corridor tests will run through until 2018.

Added value

Between 2010 and 2015, during the years following the financial crisis, the World Economic Forum reported that the African economy was out-performing the world average. Further, the International Monetary Fund predicted that by 2020, the African continent would be the second fastest growing economy.

The message is clear; Africa is investing in its future. By targeting investment in healthcare, pharmaceutical innovation and R&D, in addition to supporting private sector investment through PPP structures and innovative political policies, Africa's innovation landscape, driven by investment in its people, is set to change dramatically.

Gowling WLG is well-placed to offer expertise and advice in order to provide added value to new entrants, SMEs or multinationals. Our global sector-focussed approach, regional expertise, experience and know-how allows for multi-jurisdictional and commercial expertise in a range of different sectors including healthcare, life sciences, tech, financial, natural resources and projects & infrastructure.