ImpactAlpha, April 20 – Africa’s health systems may have an advantage in the fight against COVID: experience mobilizing around outbreaks of infectious diseases.
Watching the public health calamities that unfolded in China, Europe and the U.S., African leaders moved swiftly to close borders, impose curfews and implement lockdowns. So far, there are fewer than 22,000 confirmed cases on a continent of 1.2 billion people, though the lack of testing has kept the official numbers artificially low. The World Health Organization last week warned that Africa may be the pandemic’s next epicenter.
Africa’s growing ecosystem of health startups are redirecting their products and mobilizing services to help redirecting their energy and resources to help public health systems stay ahead. The homegrown solutions are engineered to bolster – or work around – the systematic shortcomings of many national healthcare networks.
Health systems across the continent suffer from fewer resources than other parts of the world. In the best case scenario for fighting COVID, Africa’s health care systems will need to collectively increase their spending by an estimated $44 billion, which represents a 32% increase. But lessons from previous epidemics, established protocols and creative hacks prove effective when caseloads spike and fast action is required.
At least in Nigeria and Kenya, “The public health infrastructure is better than people might assume,” says Michael Moreland of Field Intelligence, a drug-supply forecasting and logistics company that operates in both countries. “They are better prepared for infectious disease, and they take it very seriously because it happens here all the time.”
Indeed, while the world has been fighting COVID-19, Nigeria has been battling an outbreak of Lassa fever, a type of viral hemorrhagic fever, like Ebola. This year’s epidemic, Nigeria’s largest on record, has caused at least 188 deaths out of nearly 1,000 confirmed cases.
Field Intelligence’s mom-and-pop pharmacy customers are seeing a shift in foot traffic because of the local lockdowns. Small residential locations are getting significantly more business than otherwise high-traffic office and shopping complex locations, explains Moreland. In turn, the company is rerouting its supply.
“Demand for pharmaceuticals is like a balloon,” he says. “When you squeeze in one place, it expands somewhere else.”
Likewise, with health systems conserving resources for an inevitable increase in COVID patients, there is intensifying pressure on other points in the health services sector.
In Lagos, medical products delivery company LifeBank, has launched an open-source repository of critical medical supplies for hospitals to improve the logistics speed and transparency for critical supplies like blood and oxygen. The company built its data platform to enable hospitals to list needs and excesses of respirators, defibrillators and intensive care unit beds.
LifeBank is also partnering with the Nigerian government’s Institute of Medical Research to launch a drive-thru COVID testing site in the city of Lagos, which it plans to expand across Lagos state.
LifeBank is a portfolio company of Co-Creation Hub, a startup accelerator in Lagos that also operates in Nairobi. CcHub teams in both locations are helping early-stage health tech and other startups pivot to address critical needs – and business opportunities.
“This is what they’re designed to do,” says Victoria Fabunmi, investment manager of Co-Creation Hub. “They do what’s needed to respond to gaps.”
DrugStoc, another Nigeria-based CcHub startup, is helping the country’s frontline health workers procure personal protective equipment, or PPE. The company is a pharmaceutical intermediary that works with hospitals and pharmacies to improve drug quality and combat fraud by sourcing and validating their drug supplies. In response to COVID, its warehouses are now stocking gloves, masks and other PPE.
LifeBank and DrugStoc work with local drug and medical supply manufacturers to minimize their exposure to global supply chain disruptions as much as possible, Fabunmi explains.
Zipline, the California-based drone delivery company that has deployed its supply chain and logistics network in Rwanda and Ghana before its planned expansion to the U.S., is redirecting its efforts to COVID support. The company, which says its unmanned-delivery model is optimized for social distancing, has warehouses with emergency stocks of masks and gloves that can be delivered by airs to regional hospitals. Zipline last year raised $190 million from TPG’s Rise Funds, Goldman Sachs and others.
The COVID crisis underscores the importance of functional medical supply chains, especially in countries where the ratio per population of doctors, hospital beds and lifesaving supplies is well below that of wealthier countries.
The pharmacy chain Goodlife was already offering health consultation services at its 70 retail locations around Kenya. The pandemic, and Kenya’s ensuing lockdown, forced the company to temporarily shelve plans to nearly triple its retail footprint across East Africa. Instead, it’s building up telemedicine services and a new prescription delivery service. It is also looking at expanding its line of locally manufactured consumer health products. Even before the coronavirus, it had kicked off the strategy with a white label hand sanitizer.
“People’s health needs need to be met through new delivery models, particularly with the lockdowns,” says Felix Olale of LeapFrog Investments, an investor in Goodlife. “This is important for the long-term. Goodlife and others will invest in ways to meet customers’ needs outside of a local pharmacy.”
The economic impact of COVID has hit Africa even before the full brunt of the health crisis. Kenya was facing an economic slump before the pandemic, with the Central Bank of Kenya revising the country’s 2020 economic growth prospects from 6.2% to 3.4%. Oil-rich Nigeria’s economy has been hard hit by the global oil price collapse, forcing the central bank to devalue the official currency rate.
Companies like Goodlife and Field Intelligence sit at the junction between the health and economic impacts of the pandemic. Both are working to ensure that consumers continue to have access to prescriptions and other types of care while movement and routines are disrupted.
Field Intelligence is also trying to support its customers, which are themselves small businesses, in weathering COVID’s economic impact. The company is helping pharmacies that are seeing reduced foot traffic test out home delivery services to keep revenues coming in. Also, its unique inventory financing model, which allows pharmacies to pay for drugs as they sell them, alleviates businesses’ working capital pressures.
“We’re all taking a tech-based approach to the situation,” Field Intelligences’ Moreland says. If immediate financial pressures turn into a broader economic crisis however, he says, “That’s bigger than any one company can solve.”
“The concern is the economy,” agrees CcHub’s Fabunmi. “Most people are supported by small businesses, which are shut down, or live day-to-day.” Rather than go hungry, she says, “They’ll take their chances with the disease and go back out in the streets, and to work.”