‘The absence of regulation in the health tech space is a risk’- Remi Adeseun of Salient Advisory
The African health tech space has enjoyed considerable growth in recent times, many thanks to the outbreak of the Covid-19 pandemic. According to reports, funding into health tech companies in Nigeria rose 404% in 2020, driven by the global health pandemic.
The situation isn’t different in the rest of Africa. Helium Health raised $10 million in May last year. 54Gene which was actively involved in the Covid-19 fight raised $15 million. mPharma raised 17 million much later in the same year. While these don’t come anywhere close to funds raised by fintechs, they, however, tell the story of a thriving space.
Yet, all these investments and growths could end up amounting to nothing in the absence of proper regulation. This is according to Remi Adeseun, the Director of Salient Advisory, a Health Consulting company. In a chat with Technext where he broke down his company’s report on the ‘Innovations in Health Product Distribution in Sub-Saharan Africa’, the director said the absence of regulations is a major risk for the health tech space.
The absence of regulation is a risk and startups who have good structure and who have good advice will be wary because of reputation to brand. Because somebody can just slam a new policy or a new law that was not there at the time and you can get bankrupted just overnight.Remi Adeseun
Overall, the Nigerian tech space has proven to be quite tricky when it comes to regulations and government policies. Innovation always precedes regulation and in the Nigerian situation, regulators have more or less stifled the innovations they claim to be regulating.
From Oride, Gokada and MaxNG that all suffered the brunt of the Lagos okada ban to the regulation of the e-hailing sector which some stakeholders have described as extortion disguised as regulation. More recently, the CBN has restricted crypto trading and barred fintechs from using BVN for verification while its sister agency, the SEC is placing hurdles in front of tech investment platforms.
With all these in mind, one might be tempted to conclude that the absence of regulation, or at least minimal to zero government involvement in determining the scope and limits of innovations would be better preferred. But the director thinks that could turn out to be very disastrous.
“We don’t ask for just any regulation, we say that we want to see innovation-friendly regulations. It’s always better to have the definition of what’s acceptable and what’s allowed,” he said.
The need for having solid regulations in the health tech space is not just for the sake of protecting business investments and preserve operations, it is even more pronounced in attracting possible partners that would boost the rapid distribution of medicines. Bringing it down to heath tech space, Remi told the story of a giant e-Commerce company that refused to involve in distribution of medicines unless there are regulations in place.
“One of the e-commerce giants who has the capacity, significant capacity to improve access to medicines said they will not even go near medicines, other than the over-the-counter medicines until they are regulations. So you see, that that’s a loss,” Remi said.
He also talked up the need for these regulations to be harmonised across the continent. This, he insists, would eliminate the needless tediousness of dealing with multiple regulatory agencies in multiple African countries. This would, in turn, improve the ease of expanding health services to people who need them across various African countries.
He also advocated a new approach to the African Medicines Regulatory Harmonization (AMRH) Project currently headed by the Director-General of NAFDAC. The project aims to produce uniform and standardized rules for registering medical products across African countries. For example, if a product is manufactured or registered in Nigeria or Ghana, it can also be assumed to be registered across Africa, similar to the EU type of process.
The Salient Advisory director insists that while the project has been going on successfully for more than 10 years, now is an opportunity to take a different route.
“Let’s start with the end in mind by having the model law already from the beginning, and the countries can be adapt and domesticate the law, not to be carried away by any temporary absence of rules when the rules can come in tomorrow and completely devastate people’s investments and related themes,” he proposed.
The issue of regulations will always be recurrent for as long as there’s innovation. Boasting one of the biggest tech ecosystems in Africa, Nigeria will always witness great innovations and the consequent efforts to regulate them. It now behoves on the innovators to seek regulations where they exist or push for regulations in their fields before sinking funds into it.
Co-founder and Managing Director of PlentyWaka, Johnny Enagwolor captured this when he narrated how his company navigated regulatory waters before launching their bus-hailing business in Lagos.
When we came into this space there was no bus-hailing regulation in place. We had to make them put a regulation around that. We have been able to align with the state government as regards a mass transit plan for the long term. They are also coming up with a reform system to also key into a technology (payment) system where people can either tap and go, book buses from an app. This is already what we do so where the government is going in the future is where we are right now.Johnny Enagwolor
Mr Remi Adeseun believes being proactive with regulations in this manner is the way to go for the health tech space rather than playing and feeling comfortable in a non-regulated space while the risk of a suddenly being hit with one hangs in the air.
“We shouldn’t be carried away by any temporary absence of rules when the rules can come in tomorrow and completely devastate people’s investments and related themes,” he said.
If you’d like to get featured on our Entrepreneur Spotlight, click here to share your startup story with us.
Get latest Technology news, reviews, business-related content with a deliberate emphasis on the African narrative and insightful analysis in Nigeria – straight to your inbox.