How innovation can reshape Africa's health supply chains

The health supply chain sector in Africa is undergoing a significant transformation driven by innovation and technology. A recent market intelligence report by Salient Group has revealed a decline in the number of new entrants in the health supply chain sector from 2021 to 2022. Despite this decline, the report emphasizes the role that innovation is playing in boosting funding and improving healthcare access in African ecosystems. Remi Adeseun, Director at Salient Advisory, shared insights from the report in an interview with CNBC Africa. During the interview, Adeseun highlighted the positive impact of government partnerships with tech-enabled health supply chain players in scaling innovation. He noted that over 50 government partnerships across the continent have significantly enhanced the reach and impact of these innovators. By directly engaging with governments and other large buyers, innovators are bridging critical gaps in the availability and accessibility of quality medicines, particularly in underserved rural areas. Adeseun pointed out that one of the key takeaways from the report is the democratization of access to healthcare products facilitated by tech-enabled platforms. These platforms have streamlined supply chains, reduced costs by eliminating middlemen, and ensured equitable distribution of essential medicines. The partnerships between governments and innovators have strengthened both public and private sector health systems, creating a more robust healthcare ecosystem. The report identified nearly 350 innovators digitizing health supply chain processes across Africa, with headquarters in 27 countries on the continent. Regions such as West Africa, East Africa, Southern Africa, and North Africa are witnessing significant innovation activity in the health supply chain sector. While countries like Egypt and South Africa lead the pack, other regions like Francophone West Africa are catching up with notable progress in countries like Senegal and Cote d'Ivoire. Government partnerships have played a crucial role in catalyzing innovation and investment in the health supply chain sector. Adeseun highlighted successful collaborations between governments and innovators in countries like Nigeria, Kenya, Gabon, and others. Initiatives supported by organizations like the Bill and Melinda Gates Foundation have facilitated knowledge sharing and funding to modernize supply chain systems in African countries. The impact of these innovations on healthcare access has been significant, particularly in terms of improving affordability and availability of essential healthcare supplies. By cutting out unnecessary middlemen, tech-enabled platforms have helped stabilize prices and establish strategic relationships with manufacturers. Innovators like M-Pharma and Advantage Health Africa have been able to lock in prices for extended periods, mitigating the impact of price fluctuations on consumers. Private sector equity investment has played a vital role in driving sustainable growth in the sector. Over $2.6 billion has been invested in roughly 350 health supply chain innovators, with over 90% of the funding coming from private equity investors. This trend signals growing confidence in the sector and bodes well for its future development. However, challenges remain, particularly concerning gender equity in funding distribution, with only about 2% of funding being allocated to women-founded firms. Adeseun also addressed concerns around regulatory environments and policy frameworks impacting investments in the sector. He acknowledged the need for innovation-friendly regulations to attract more investments and streamline operations across different African countries. Efforts are underway to harmonize regulations and create a more conducive environment for innovation in the health supply chain sector. In conclusion, the ongoing innovation revolution in Africa's health supply chain sector is reshaping the healthcare landscape on the continent. With governments, private sector investors, and innovators collaborating to enhance access, affordability, and efficiency in healthcare delivery, the future looks promising for improved health outcomes across Africa.