Tuesday, November 25, 2014

A Healthier, Wealthier Africa

ZURICH – The BRIC countries (Brazil, Russia, India, and China) have long been the focus of emerging-market investors. But it is in Africa, a region with the world’s second-fastest growth, where the next big business opportunities lie. In about one-third of the continent’s 55 countries, annual GDP growth is above 6%, and Sub-Saharan Africa grew at an estimated 5.1% pace in 2013.

Foreign investors report that their return on investment in Africa is higher than in any other emerging region. By 2040, the continent’s working-age population will total an estimated 1.1 billion people, providing businesses with a larger labor pool than even China or India. Moreover, economic expansion is taking place not just in urban centers, but in small towns and villages as well.

However, Africa also faces major challenges. One of the biggest concerns is inadequate health care. Preventable and treatable diseases plague the population. Life expectancy is 14 years below the global average. Nearly one in 20 adults in the 15-49 age group in Sub-Saharan Africa lives with HIV – roughly six times the global average. Every minute, an African child dies from malaria.

Africa’s rapid economic growth and urbanization are also creating new health challenges. Non-communicable diseases are projected to become the most common causes of death by 2030. The number of diabetes cases, for example, is expected nearly to double over the next two decades.

If left unaddressed, the dual burden of communicable and non-communicable diseases could jeopardize Africa’s economic potential. To avoid this, three critical areas of health care must be addressed: technology, infrastructure, and education.

Africa has witnessed some remarkable technological leaps. A decade ago, telecoms infrastructure was almost non-existent. Today, one in six people owns a mobile phone, the benefits of which go far beyond easy communication. Africa has pioneered the use of mobile banking, with local players like M-Pesa and global corporations like Citi demonstrating how new technology can provide vital financial services to the unbanked population. Mobile money and digital wallets accessed on cellphones eliminate the need for physical cash in rural areas, where financial services are limited and carrying large amounts of cash is risky.

Joining this mobile-phone revolution, Novartis is working with five African governments and private-sector partners to improve drug distribution and monitor the supply of anti-malaria medicines in rural areas, using text messaging and electronic mapping. Previously, patients would travel to distant health clinics only to find that the medicines that they needed were no longer in stock. Now, thanks to the SMS for Life project, vital medicines can be quickly redistributed to where they are most needed.

A second crucial aspect of improving Africa’s health care is infrastructure. Good rail lines, roads, and ports allow products and services to be distributed widely at lower cost, and to benefit from economies of scale. This is an essential component of any country’s economic development. And nowhere are the benefits more evident than in the provision of health care.

Fortunately, several companies are rising to the challenge. Coca-Cola, for example, is contributing its supply-chain expertise to map out health facilities and implement stock-management software to support the distribution of bed nets, contraceptives, anti-AIDS drugs, and vaccines to remote villages. Meanwhile, Novartis is piloting a “social venture” business model to give poor people in remote villages access to vital medicines that are packaged in small, affordable doses.

Finally, education is one of the most powerful tools for reducing poverty and generating sustainable, inclusive economic growth. But, given limited resources and few teachers, too many children are being left behind. Public-private partnerships are helping to change this. The IT company Cisco, for example, works with NGOs to connect communities and help students develop skills in information and communications technology.

Poor education also affects health. Although Africa accounts for one-seventh of the world’s population, it bears one-quarter of the global disease burden, yet has a mere 2% of the world’s doctors. Unsurprisingly, many health problems stem from ignorance about diseases and basic hygiene.

So Novartis has formed a partnership with the Earth Institute, the United Nations, and private-sector groups to train and deploy by 2015 a million community health workers in Sub-Saharan Africa to deliver basic treatment and preventive care, and to track disease outbreaks. The idea is that local people will learn how to support their communities, rather than rely on handouts, and thereby lift themselves out of poverty permanently.

Africa is increasingly showing signs of its promise, but innovative solutions to improve its people’s health are essential if the continent is to approach its potential. This will require more than philanthropy: it will demand new commercial models that solve health-care issues, help the economy to grow, and benefit those who invest in Africa’s future.

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    1. CommentedJeremy Sobotta

      I'm happy to see that the spirit of Alma-Ata lives on despite continuing to be a seemingly insurmountable goal, but this seems eerily reminiscent of some of Jeffrey Sachs' other pie-in-the-sky ideas for the world's poorest to "lift themselves out of poverty" by some rich Western organization throwing temporary money at a symptom of a problem while ignoring its true root cause. Community based primary healthcare organizations have certainly shown some glimmers of success - particularly in India and South Africa. However, these have only worked because of their grassroots nature. It sounds to me that, like many of the "noble" examples cited here, this is more about exploiting the growth of said wealth with ROIs higher than any other emerging region, and less about truly understanding the deep cultural norms that shape African healthcare today.

    2. CommentedRobert Snashall

      Yes, private sector 'corporate social responsibility' is single handedly solving Africa's litany of problems.
      C'mon Project Syndicate, this is a place for intelligent reasoned analysis, not this advertisement as to how great Novartis is.

    3. Commentedj. von Hettlingen

      Mr. Jimenez, it is gratifying to see your company, the Novartis "working with five African governments and private-sector partners to improve drug distribution and monitor the supply of anti-malaria medicines in rural areas".
      It's a good start, given the continent has the largest number of nations on earth – 55 in total and a diversity of climate zones, landscapes, cultural, linguistic, ethnic and historic backgrounds.
      Despite its minerals, oil and gas, many Africans live in abject poverty, because the the money big companies pay to governments to extract resources, goes missing. Corruption is rampant and the effort to beat "resource curse" too little.
      Does Novartis conduct scientific research in Africa? Power outages, strikes, security concerns and equipment shortages are the routine challenges many foreign companies face. In low-resource countries where ministries of health have small budgets, the medicine and vaccines are often provided by manufacturers of generic drug based in India, China, Brazil etc. making the business of pharmaceutical giants like Roche, Novartis, Merck etc. less worth while.