Export Opportunities for Medical Devices in Africa

With close to one billion people and a GDP of approximately $1.7 Trillion, Africa presents a sizeable investment opportunity. Today, 26 of Africa’s 54 countries have achieved middle-income status. Africa has a larger portion of its population entering the workforce than any other region in the world. There are 720 million African mobile users, more than in Europe or North America. Five of the 12 fast est-growing economies in the world are in Africa.

At the country-level, however, the story is less enticing. If one considers that 3 countries (South Africa, Nigeria and Egypt) account for over half of Africa’s economic activity, it is quite clear that the remaining 51 countries suffer from a lack of scale. To address these challenges, African countries have united together to establish Regional Economic Communities (RECs). These RECs aim to boost regional integration and economic development and, thereby, improve the profile and competitiveness of its member nations. The most prominent RECs in Africa include: Southern African Development Community (SADC), Economic Community of West African States (ECOWAS), Common Market for Eastern and Southern Africa (COMESA), and East African Community (EAC).

African countries have united together to establish Regional Economic Communities (RECs). These RECs aim to boost regional integration and economic development and, thereby, improve the profile and competitiveness of its member nations.

With the signing of African Continental Free Trade Area by 44 out of 54 countries, within 2-3 years, this will become a single market.

The Africa Medical Devices Market is growing with a steady pace; mainly due to the rapidly growing middle-income group, increasing healthcare expenditure, increasing number of medical tourists, proliferation of hospitals, government programs and support, and increasing incidence of life style diseases. Moreover, rising economic growth also drive the market in this region. We expect the Africa Medical Devices Market to reach around $ 7069.61 million by 2025 from $ 4900 million in 2017, by the end of the forecast period at a CAGR of 6.3 %. However, the major markets are in the mid-income countries such as South Africa, Kenya, Nigeria, Egypt and Morocco. Economies of countries like Ethiopia, Ghana and Ivory Coast are rapidly expanding to reach middle income status.

The market of medical devices is growing rapidly in Africa region owing to upgrade of hospitals, introduction of health insurance policy, and rapidly growing middle-income group. Government is focussing more to improve the life of their citizens, thus they are more focusing on the establishment of best hospitals in the region. There is a large base of NGO hospitals and new private hospitals are opening at a rapid rate. Ethiopia alone will open 50 new hospitals. These are the factors which are fuelling the growth of the market of medical devices with the significant rates in this region.

However there exists huge barriers too. The most formidable barrier is the low per capita income and the poor connectivity and infrastructure of Africa. Although Africa has a large middle-class consumer base there exists the reality that approx. 60% of population survives on less than USD 2 a day. Thus, two things should be noted.

African medical devices market is very price sensitive and opportunities lie at the lower end with devices with lower cost and features to dominate the segment. This presents a huge opportunity for Indian companies with frugal engineering skills.

Traditionally, our exporters have concentrated their efforts on the larger markets such as South Africa, Egypt and Nigeria. African Continental Free Trade Area under implementation will create larger markets. To get entrenched in the African market, it is very important that products must be visible to the decision makers and influencers on a regular basis through regional trade fairs, both on East & West coasts. At present, our Export Promotion bodies can only cover a fraction of the markets. Exporters, especially SME should join hands and cooperatively book smaller stalls which can be manned by one or two representatives on behalf of all exhibitors. They can also distribute composite directories of their products to the visitors which can act a reminder when they go to their work places. In this manner, small exhibitors can participate in more exhibitions and create greater visibility for their products.

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