Impact Investing | August 10, 2023

Let’s retain talent and crowd in investment in healthcare innovation in Africa

David Bank

Get a weekly pulse on news and trends in impact investing with our free newsletter.

*I agree to receive marketing emails from ImpactAlpha, its affiliates, and accept our terms of use and privacy policy.
By signing up you agree to receive marketing emails from ImpactAlpha Inc. and accept our Terms of Service and Privacy Policy.
ImpactAlpha Editor

David Bank

COVID-19 was a disaster for public healthcare across Africa. For a sector traditionally under-resourced, poorly administered or both, the pandemic showed the continent’s healthcare infrastructure remains woefully inadequate. The continent needs to severely invest in the training and retention of the healthcare workforce. 

In Nigeria, the outflux of skilled healthcare talent has accelerated with the waning of the Covid-19 pandemic. 

With travel returning to normal (mostly), the Nigerian healthcare system is losing critical healthcare talent to providers in the United Kingdom and the United States, which are recruiting nurses from markets that are already suffering from severe healthcare skills shortages.  The pandemic exposed deficiencies in the healthcare systems of more developed countries as well, increasing demand for healthcare skills.  

For example, about one in four nursing positions in the UK are filled by nurses from countries such as Nigeria, Ghana, and Nepal. All three countries are on the World Health Organisation’s red list, where the direct recruitment of healthcare professionals is discouraged because of the skills shortages red list states face.

Healthcare innovation 

Given Nigeria’s healthcare skills gap, the question is, “Can we train enough health workers in the next few years to catch up?” 

The honest answer is no. The base needed to do so – beginning at basic education and running through to the current healthcare system, government support, and tertiary education – does not exist. Nor will the situation improve anytime soon. These are hard truths, but you cannot change the situation on the ground without acknowledging the monumental challenges standing in the way of positive change. 

We need to think differently. We need to consider new solutions and models that can help close the healthcare gap on the ground where legacy healthcare systems cannot go. This is why healthcare innovation is so important. How can we use innovation so that more people receive quality healthcare in a market where healthcare workers are in short supply?

Is it the banking model, where a bank that cannot open a branch instead provides an ATM with a range of services that the local population finds valuable? How can we copy a model like that? 

Telemedicine reached its zenith during the pandemic and can effectively deliver quality information-driven services at scale. Telemedicine is only effective when the infrastructure you need to use it, such as telecommunications and digital devices, are available. 

And a diagnosis only gets you so far. Telemedicine’s impact is limited to its recipients’ access to healthcare in their locations. You still require robust primary healthcare and a strong referral system linking secondary and tertiary care.

Effective demand 

Part of the problem facing Nigeria’s healthcare system is financial.

Healthcare insurance isn’t just a nice-to-have. It is a crucial ingredient in any country with an effective healthcare system because, without it, you cannot achieve effective demand in healthcare. 

In Nigeria, approximately 90% of healthcare expenses, are paid out of pocket, with a large healthcare insurance gap across the country, resulting in the lack of effective demand within the Nigerian healthcare system.

Effective demand is vital because when a healthcare system reaches it, it means that the demand for healthcare is supported by patients’ ability to pay for it. If effective demand exists within a healthcare system, attracting investment and inviting private sector participation becomes easier. 

Greater investment and participation support the development of healthcare infrastructure, including supply chains, skills development, and the broadening of the public healthcare safety net.

Serious thought should be given to developing and implementing a national health insurance policy. 

Such a policy can amalgamate the best of public and private. The system can be administered by private entities and experienced healthcare organisations, creating a minimum guarantee of efficiency. Government or a new public entity can provide policy support and oversight to protect the public interest. 

Startup ecosystems 

In such a system, innovators such as healthcare startups and private healthcare providers can be deployed in the areas where they can have the most impact. These innovations can be deployed on a pilot basis, and depending on their level of success, they can be expanded where suitable.

These potential opportunities are important to recognise, even in gaps such as the Nigerian public healthcare system’s lack of necessary infrastructure on a wide scale to achieve its core goals of prevention and treatment. 

Healthtech companies in Nigeria and elsewhere in Africa are highly skilled at embedding themselves into whatever infrastructure exists, closing gaps, and creating increased efficiencies within their spheres of influence. 

For example, in Kenya, you have Zuri Health, an “all-in-one platform” that provides healthcare services to patients, such as consultations, pharmacy services, and home-based testing. 

The pandemic taught us that hospitals can be a luxury instead of the “last mile” it is envisaged to be in a traditional end-to-end healthcare system. Taking lessons from the pandemic, Zuri Health leverages available telecommunications infrastructure – which is far more rife across the continent than healthcare infrastructure.

First, by lowering the cost of contacting a doctor, since most Kenyans have a smartphone. Second, by closing the knowledge gap, because it’s one thing to know you are sick, but it’s another to know how or where to find a doctor. 

And third, by becoming an aggregator of quality healthcare services at a reasonable price, leveraging Kenya’s existing healthcare skills and infrastructure base. A similar platform could be developed for Nigeria. 

There is also Wellahealth, a Nigerian startup that offers micro health insurance for high-occurrence diseases such as malaria. 

In Nigeria, pharmacies play an outsized role in the healthcare system as a first point of care because many Nigerians self-diagnose and self-medicate. Recognising this, Wellahealth has partnered with pharmacies across the country so that the health insurance they offer covers the costs of these drugs so that patients are not paying out of pocket. It’s far easier to set up a pharmacy than a hospital or clinic in Nigeria just on cost alone, with healthcare users adapting to their greater availability and ease of access.

Healthcare is a highly complex sector that needs all stakeholders to push in the same direction to move the dial so that people on the street can benefit. 

To attain that goal, we should not ignore any possible solution and crowd in locally-driven innovation wherever possible. 

COVID-19 has shown that we still have a long way to go in Nigeria to reach a place where anyone can access basic healthcare that citizens in other countries take for granted. 

Ayotunde Aladejana is Global Partnerships Lead at Founders Factory Africa.