How best to invest in Africa in Healthcare
In Africa, outpatient services are much savvier investments than hospitals, says Steven Adjei, founder of BlueCloud Healthcare, an investment advisory and incubator fund for healthcare service businesses in Africa, told us this week.
So if not hospitals, where? Pharmacies, diagnostics and outpatient clinics are the buzzwords for BlueCloud. There’s also a booming wellness market, says Adjei.
Adjei told us that the risk involved with investing in hospitals – not only the funding needed but also the human capital, which is scarce on the continent – isn’t worth it, especially when considering what is really needed on the ground in terms of healthcare services.
Adjei says Western investors love the idea of investing in a hospital as there’s a misconception that all healthcare must take place within one. Just as this isn’t the story in Europe, it’s not in Africa.
But are there really enough investable businesses that aren’t hospitals? Chaotic regulations (or a complete lack of them ) can put investors off small businesses and opens the market up to cowboy providers or copycats who will compete on the lowest price, not quality services. Adjei says there are plenty of quality investment opportunities amongst the duds, but most are too small to pique the interest of private equity groups who are trying to sniff out big consolidators akin to the Indian groups Apollo and Fortis. And that’s another problem – these sorts of big players don’t exist in Africa the way they do in India, and so investment strategy must be adapted across the Developing World.
We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.
