Opportunities and Challenges in Ethiopia’s Private Sector Leap into Digital Health

By Team Chemed

Chemed is a digital health company that aims to digitalize Ethiopia’s pharmaceutical supply chain. Chemed can be reached here.

Digital health has emerged as a transformative force in the healthcare industry worldwide, and Ethiopia is no exception. With advancements in technology and increasing internet penetration, digital health solutions are rapidly evolving and making a positive impact on healthcare delivery in the country.

The Ethiopian Health Care system is largely reliant on public sector investment and private sector participation remains relatively minimal compared to other sectors.

Nowadays, the increasing involvement of private sector players, especially in digital health care delivery, is at a promising phase where we see the introduction of innovative digital approaches to health care. This has been, however, marred by particular challenges, if addressed, will result in a flourishing digital health sector, mainly led by the private sector.

These are some of the challenges faced by private-sector players:

Limited Digital Infrastructure:

A robust digital infrastructure forms the backbone of successful digital health implementations. Unfortunately, Ethiopia’s digital infrastructure is still nascent, particularly in rural areas where mobile device ownership, internet connectivity and reliable power supply remain significant hurdles. Insufficient infrastructure not only restricts the implementation of digital health solutions but also hampers the private sector’s ability to reach a wider population. To address this challenge, concerted efforts are needed to invest in expanding digital infrastructure and improving connectivity across the country.

Technical Expertise and Digital Literacy:

Digital health relies heavily on technical expertise and digital literacy among healthcare professionals and the general population. Although initiatives such as the Digital Health Innovation and Learning Center (DHILC) and digital literacy projects have been established, there is still a gap in widespread proficiency. Private sector companies often face difficulties finding skilled professionals who can effectively implement and scale digital health solutions. Continuous investment in capacity-building programs, training initiatives, and educational resources is crucial to bridge this gap. Collaborative efforts between academia, industry, and the government can help build a skilled workforce equipped to leverage digital technologies for healthcare.

Access to Funding and Financial Resources:

Securing adequate funding and financial resources is a major challenge faced by private sector companies and startups in the digital health space. Research and development, infrastructure development, and scaling up operations require substantial investments. However, limited financial resources often hinder the growth and sustainability of digital health initiatives. To overcome this challenge, it is essential to explore innovative funding mechanisms, establish public-private partnerships, and attract domestic and international investments. Government support in providing funding opportunities and creating favorable policies can significantly boost the private sector’s participation in digital health.

Fragmentation and Lack of Coordination:

Collaboration between various stakeholders, including government agencies, private sector companies, and healthcare providers, is crucial for the success of digital health initiatives. Unfortunately, fragmentation and a lack of coordination often impede effective collaboration. To tackle this challenge, stakeholders must work together to establish a coordinated ecosystem. This can be achieved through the formation of partnerships, the establishment of communication channels, and the creation of platforms for knowledge sharing and best practices. Additionally, regulatory frameworks and governance structures should be developed to ensure smooth stakeholder collaboration.

These are some enablers and opportunities private sector players can leverage:

National Digital Health Strategies:

Ethiopia has recognized the importance of digital health and has developed a comprehensive Digital Health Blueprint that sets out the country’s priorities and aims for the next decade. This blueprint serves as a strategic guide, creating an enabling environment for the private sector to actively engage in product and service development, deployment, and maintenance. Private sector companies can align their initiatives with the Blueprint, focusing on specific areas of digital health that contribute to the government’s vision and goals.

Startup-Friendly Environment:

The Ethiopian government has introduced the Ethiopian Startup Act draft document to support the growth of startups, including those in the digital health sector. This act, when it goes into effect is expected to simplify the registration process, reduces bureaucratic hurdles, provides incentives to start-ups to ensure startups can operate with ease. Startups in digital health can take advantage of this favorable environment, leveraging the act’s provisions such as pre-registration certificates and tax breaks for early-stage companies. Moreover, an innovative fund under development will further enhance financial support and provide a platform for startups to flourish.

Expansive Market Potential:

Ethiopia’s growing population and infrastructure expansion present a higher demand for quality healthcare services. This presents a significant market potential for private companies in the digital health space. By developing innovative and tailored digital health solutions, companies can cater to the diverse healthcare needs of the population. Whether it is remote patient monitoring, telemedicine, or health information systems, there is ample room for private sector innovation to drive improved health outcomes and accessibility across the country.

Collaborative Opportunities:

Digital health initiatives require collaboration among various stakeholders, including government agencies, private sector companies, and healthcare providers. Private sector companies can collaborate with government entities and healthcare institutions to jointly develop and implement digital health solutions. By pooling resources, expertise, and networks, these partnerships can accelerate the adoption and scale-up of digital health innovations.

International Partnerships and Investments:

Ethiopia’s digital health sector has gained international attention, attracting investments and partnerships from global organizations. Private sector companies can explore collaborations with international players, leveraging their expertise, funding opportunities, and global networks. Such partnerships can provide access to resources, technical know-how, and best practices, further fueling the growth and advancement of digital health in Ethiopia.

Ethiopia’s journey towards embracing digital health presents a landscape of both challenges and opportunities. While limited digital infrastructure, technical expertise gaps, funding constraints, and coordination issues pose hurdles, the potential for growth and innovation in the private sector remains immense. The alignment with the national digital health blueprint, a startup-friendly environment, a burgeoning market, collaborative opportunities, and international partnerships open doors for transformative advancements in healthcare delivery. By addressing the challenges head-on and capitalizing on the opportunities, Ethiopia can pave the way for a robust and inclusive digital health ecosystem, revolutionizing healthcare outcomes and ensuring a healthier future for its population.