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EF: Could you elaborate on the main challenges Africa is facing currently and how to address them to create a resilient and sustainable healthcare? 

KO: The African continent, with a population of over one billion people, more than half of whom are under the age of 30, with increasing urbanization, changes in diet and lifestyles, is experiencing significant challenges and opportunities in the healthcare sector. As the continent grows, there is a rising prevalence of non-communicable diseases alongside the traditional focus on communicable diseases like waterborne and foodborne illnesses. 

Non-communicable diseases, such as cancer, hypertension, stroke, heart and kidney disease, osteoarthritis and diabetes, are becoming more prevalent, reflecting a changing disease burden. Consequently, there is a growing demand for diagnostics and healthcare therapies. 

During the pandemic, the continent's healthcare vulnerabilities were exposed. Africa imports approximately 90% of the vaccines it requires for its own population including children. Africa heavily relied on imports of diagnostics, essential medical supplies, including personal protective equipment, and pharmaceuticals. The lack of self-sufficiency became evident during the covid19 pandemic, impacting the continent's ability to respond effectively to the crisis.  

The issue of healthcare infrastructure further compounds the challenge. The existing systems must be adequately equipped to support the delivery of healthcare on the continent. Any lack of preparedness extends to critical vaccines, with 96 per cent being imported, raising concerns about over-dependence on external sources. 

The situation offers an imperative and an opportunity for change. Localizing and regionalizing pharmaceutical and vaccine manufacturing can increase self-reliance and access to treatment. Additionally, increased investment and support for areas like oncology, dialysis, and non-communicable diseases will further improve healthcare outcomes. 

Addressing these challenges and seizing the opportunities will contribute to a more robust and sustainable healthcare landscape for Africa. By building on the foundations of localized manufacturing, improved diagnostics, and increased support for critical therapies, we can create a healthier future for the continent. 

EF: What is the role of healthcare across the different businesses in Africa in which IFC is investing? 

KO: As Sector Lead for Health & Education in Africa for IFC, leading the health and education sector across the continent, I recognize the crucial role of education in the healthcare industry's growth. To support the expansion of healthcare facilities and diagnostics, a skilled workforce is essential. The African continent needs well-trained, skilled professionals proficient in various aspects of healthcare delivery. These include phlebotomists responsible for taking blood samples, radiographers and sonographers who use imaging equipment in diagnostics, and nursing technicians skilled in the manufacturing of biopharmaceuticals. Robust training in Health Sciences is a vital pillar that complements healthcare investment, as skilled personnel are integral to delivering quality healthcare services. 

Manufacturing plays a significant role, particularly in the pharmaceutical supply chain. Active pharmaceutical ingredients (APIs) are essential for pharmaceutical production, and having a robust manufacturing infrastructure with proper equipment, facilities, and chemicals is necessary. Growthpoint Properties, a leading property company in South Africa and the African continent, has established a Healthcare Property business, dedicated to developing and managing healthcare properties, illustrating the importance of physical infrastructure for healthcare facilities. Their subsidiary, Growth Point Healthcare Properties (GHPH), operates as a healthcare-related real estate investment trust (REIT), demonstrating the need for both brick-and-mortar establishments while enabling healthcare operators to invest in specialized equipment to provide healthcare services effectively. 

Logistics and cold chain infrastructure are vital components related to healthcare, especially for pharmaceuticals like eyedrops, eardrops, and vaccines that require temperature-controlled transportation and storage. 

The healthcare infrastructure is closely interwoven with education, manufacturing, property, and logistics sectors, and by fostering a collaborative approach, we can reinforce and enhance the overall healthcare ecosystem in Africa. With well-trained professionals, well-equipped manufacturing facilities, appropriate real estate investments, and efficient logistics, we are poised to meet the growing healthcare demands across the continent and drive positive health outcomes for the population. 

EF: Do you see the awareness of other African countries of the importance of self-sufficiency and the need to improve on it? 

KO: Indeed, there are several promising developments in the pharmaceutical and vaccine manufacturing landscape across Africa. One notable example is Afrigen, which has been selected by the WHO as part of the mRNA health initiative, contributing to the creation of mRNA hubs to advance technological capabilities in Africa and globally. As an indirect investor in Afrigen through their majority shareholder, we are proud to be associated with cutting-edge innovations at the forefront of the vaccine development and manufacturing supply chain. 

In Southern Africa, we are actively supporting Biovac, a vaccine manufacturer chosen as the mRNA hub, in collaboration with a consortium of DFIs. We are also supporting Aspen Pharmacare, one of the African continent's leading pharmaceutical manufacturers, which served as a contract manufacturer for the Johnson and Johnson Covid-19 vaccine. This effort is geared towards bolstering self-sufficiency in vaccine production. There are other promising initiatives on the African continent including the Gates Foundation securing IP rights for the production of a malaria vaccine in Ghana. There are also other initiatives in Senegal and Rwanda which point to the continent's commitment to expanding biopharmaceutical manufacturing. 

We are witnessing encouraging strides in regionalizing and localizing the pharma supply chain. Countries such as Morocco, Egypt, and South Africa already have established manufacturers, while emerging companies in Senegal are making significant strides. Additionally, new entrants like Kenya, Ethiopia, and Côte d'Ivoire are exploring opportunities in the manufacturing space, contributing to a diverse landscape of existing, emerging, and nascent players. 

The ambitious target set by the African Union and the African CDC to have 60 per cent of Africa's own vaccines by 2030 has sparked a competitive dynamic. recognizing the potential of the African market Recognizing the opportunity presented, increasingly, major global vaccine producers and institutes are now seeking partnerships with Africa-based manufacturers for technology transfer and local manufacturing. This shift is reshaping the competitive landscape and fostering greater collaboration between African countries and global stakeholders. 

As the momentum for regionalization and localization grows, we are witnessing a transformative era for the healthcare sector in Africa. With an increased focus on technology transfer, capacity building, and self-sufficiency, the continent is poised to achieve remarkable progress in healthcare manufacturing and access to essential medical products. This collective effort will not only strengthen Africa's healthcare resilience but also have a positive impact on global health equity and sustainability. 

EF: IFC is in multiple regions. How are you prioritizing your agenda and the demands of each region? 

KO: The key themes for each region align closely. Our focus is on supporting diagnostics availability, achieved by investing in and supporting pathology, imaging, and radiology companies. Additionally, we are supporting primary healthcare delivery, empowering local clinics and hospitals to provide essential treatments post-diagnosis. Our efforts centre around addressing non-communicable diseases, collaborating with in-country and cross-border partners to tackle challenges like cancer treatment and oncology. The rise in breast and cervical cancer cases in Africa necessitates proactive engagement with companies like Roche and the establishment of the African Medical Equipment Fund (AMEF). 

AMEF plays a vital role in facilitating equipment sales or leasing from original manufacturers such as Phillips, Elekta, and Siemens to healthcare providers, furthering access to medical technology advancement. Diagnostics, primary healthcare, and innovative solutions for non-communicable diseases are areas of focus across the board. While not every country may have the scale required for comprehensive oncology treatment, a regional approach adopting hub-and-spoke models can ensure effective healthcare ecosystems. 

Recognizing the importance of economies of scale in pharmaceutical manufacturing, we strategically choose specific countries, such as South Africa, Egypt, Morocco, Nigeria, Côte d'Ivoire and Kenya, to develop manufacturing capabilities. On the other hand, diagnostics, including pathology, imaging, and primary healthcare, must be readily accessible everywhere, irrespective of scale. 

By emphasizing these priority areas and fostering regional collaboration, we aim to strengthen healthcare infrastructure and outcomes across Africa, ensuring access to vital diagnostics and treatments for non-communicable diseases, and ultimately enhancing the well-being of communities continent-wide. We also continue to support the expansion of primary healthcare centers, to address all disease burdens. 

EF: How would you rate the level of awareness of the importance of healthcare, and what advice would you give to other business leaders that are willing to invest in health? 

KO: The concept of healthcare investment is often misunderstood, but its significance cannot be overstated. Roche's data on breast and cervical cancer diagnostics highlights the economic impact of late diagnosis of cancer: delayed treatment is less effective and costlier, adversely affecting a continent where 50 percent of the workforce comprises females. The adage "Health is wealth" holds true here, as early diagnostics and prevention lead to cost-effective early treatment and the retention of a productive workforce, crucial for Africa's economic profile. 

From an investment perspective, healthcare, particularly in emerging markets, has historically proven to be one of the most lucrative sectors, with high equity investment returns globally, including in emerging markets. While profitability might stem from the unfortunate reality of illness, it also presents a significant business opportunity, in a sector which benefits from repeat or annuity business. 

Beyond economic considerations, healthcare investment aligns with moral imperatives and health longevity. For instance, diagnostics for mine workers, as provided by clients like Bergman Ross in South Africa and Ghana, not only ensure worker health but also improves their productivity and longevity in the workforce. By investing in healthcare, companies can retain healthy employees, avoiding frequent retraining and supporting the significant contribution of female workers to the continent's economic ecosystem. 

Considering the evolving landscape, investing in the nascent and potentially disruptive healthcare sector presents a compelling business case. The positive impact on both financial returns and the overall well-being of the population makes healthcare investment an attractive proposition, particularly in an era where the sector's potential for global disruption is apparent. 

EF: From a financial perspective, what advice would you give someone who is investing in something to grow, and how would they minimize their risk on a continent like Africa? 

KO: In the investment landscape, different stages require different types of investors. Early-stage companies with ideas are supported by angel capital, while venture capital steps in when ideas and intellectual capital is in place and supported by entrepreneurs and dedicated teams. As companies progress and scale, private equity investors begin to make investments, and thereafter are followed by institutional investors such as pension funds, and asset managers, and then Corporates, who are more comfortable with more traditional investments. 

Within Africa's healthcare landscape, there are several opportunities that can be found. Growing markets often present more potential for volume, better margins, and fewer competitors. Companies like Eleckta and Olympus are examples of businesses expanding into markets where their expertise in specific treatments is valuable. 

Opportunity should not be overlooked amidst risk assessment. First-mover advantages can be gained by investing early in stages with less competition. By entering less-served markets with public-private partnerships, companies can secure contracts and gain recognition. Evaluating investments with an opportunistic mindset allows businesses to tap into markets with greater potential, fewer competitors, and more room for growth. Considering these factors when approaching new markets can lead to favorable outcomes and increased success in the long term. 

EF: Upskilling young South Africans and involving them in the healthcare industry is important. What kind of initiatives can you visualize in which African youth can participate? 

KO: For example, IFC’s client, ADvTech, is one of the largest education companies on the African continent and is listed on the Johannesburg Stock Exchange. They found that there is an increasing need for technical and vocational education in the market. In several industrialized countries (e.g., Germany, Japan, US, etc.), the single biggest source of skills is vocational education, short courses, credentials, and on-the-job training. Vocational training allows the youth to work and have that constant retraining. Yes, we need doctors, but we also need more nurses, respiratory therapists, and healthcare technicians. We need radiotherapists, physical therapists, and people who can do the readings when you have your blood checked. We need sonographers who can read about your well-being. We need more of that on the African Continent, and tertiary vocational education is a huge area that is currently underserved. The importance of vocational training can be seen across most sectors in Africa, such as construction, hospitality, IT, manufacturing, and telecoms. 

EF: As a key leader investing in healthcare, how would you want your legacy to be remembered? 

KO: I want to be remembered for the impact that I made and for creating connectivity in the healthcare sector. We often think of healthcare as one vertical, but it's lateral. Firstly, healthcare cannot be sustained if we don't have the skills to develop it. Secondly, we need to broaden the base of the pyramid. We need a wide range of actors in the healthcare value chain. It's not only the physician or the heart surgeon who is critical. It's all the people you encounter before you get to the heart surgeon who has brought you there. We need to develop those skills. 

The third and final area is connectivity across sectors. When COVID hit, two of the most valuable things were access to sanitizing stations and masks. All those sanitizing stations used chloralkali chemicals. We needed companies that supplied that solution. We needed masks, and those had to be manufactured, and they were usually stuck somewhere halfway around the world. The fact that we have to have connectivity across sectors even to deliver good healthcare is something we didn't think about before the pandemic. We have to invest in the manufacturing sectors linked to the delivery of quality affordable healthcare including chloralkali, personal protective equipment, medical technology, and the skills needed to deliver healthcare on the African continent. We must invest in the pharmaceutical logistics value chain (including cold chain) in order to get the therapies, we require from the point of manufacture to the point of use. 

August 2023