BMI View: South Africa will continue to be one of the most important markets in Africa for pharmaceutical companies, medical device companies and healthcare provider s due to its economics of scale. This report provides an overall view of healthcare resources, demographic changes, and public/private investment in the sector within South Africa's nine provinces .
South Africa is the largest economy on the African continent, with a population of 53 million and a gross domestic product (GDP) that tripled between 2002 and 2013. It also belongs to the 'BRICS' group of emerging world markets. The majority of the South African population resides in the north east and south west parts of the country. While the number of hospitals in each province tends to be roughly proportional to regional population figures, the degree of public and private healthcare provision varies depending on a province's level of economic development (gross state product per capita) and, to some extent, the burden of HIV/AIDS and other infectious diseases including cholera and malaria.
5.4 million people in South Africa over the age of 15 are estimated to be carriers of the HIV virus. Combating the spread of aids is an ongoing battle. The prevalence of infectious diseases, unmet medical needs, and growing economic prosperity make South Africa an attractive healthcare market for pharmaceutical companies. This report provides an overall view of healthcare trends and forecasts within South Africa's nine provinces.
More than half of South Africa's population resides within the north east provinces of Gauteng and Kwa-Zulu Natal and the coastal province of the Eastern Cape. Gauteng has the largest share of the population followed by KwaZulu-Natal and Eastern Cape. These regions have the largest number of hospitals, a pattern we observe across the country. Gauteng is the business hub, boasting the highest absolute and per capita gross state product. It is bordered by provinces whose economies are weaker and are driven by agriculture and mining, and tends to attract those seeking commercial employment opportunities and higher incomes. Healthcare infrastructure is highly concentrated in this densely populated area and, correspondingly, the increase in population and the rise in incomes have made the private sector viable, providing some relief to public sector hospitals. Meanwhile, in the south west of the country the Western Cape follows in second place as the next wealthiest province. It is home to approximately 11% of South Africa's population. Although attractive, it does not attract as much inward migration, as it is bordered by the sparsely populated Northern Cape, which has the smallest population, and the economically underdeveloped Eastern Cape.
Government healthcare expenditure is likely to be highest in the Eastern Cape, where hospital provision is greatest and personal spending power lowest. On the other hand, government provision for healthcare is somewhat lacking in the wealthiest province of Gauteng, which boasts a high number of private hospitals with healthcare spending driven by private healthcare consumption.
The key trends, by healthcare indicator, are as follows:
Government Healthcare Provision
Provision of healthcare infrastructure and services by the state is largely skewed towards provinces with weak economies and the lowest gross state product per capita i.e. Eastern Cape, Limpopo, Kwa-Zulu Natal and Mpumalanga.
Maternal And Child Healthcare Services Vary Across Provinces
A steady decline in the number of deaths and provincial death rates suggest widespread improvement in the provision and level of healthcare services. The quality of maternal and child healthcare services differs vastly across the country's provinces. The number of live births and crude birth rate has increased over the past few years in Gauteng, Mpumalanga and the North-West but decreased in the Eastern Cape, Free State, Kwa-Zulu Natal and the Western Cape.
Private Healthcare Provision
The three provinces with the highest gross state product i.e. Gauteng, Kwa-Zulu Natal and the Western Cape boast the highest number of private hospitals and have attracted the most investment from private healthcare companies. While Kwa-Zulu Natal continues to attract public healthcare investment as a result of its high prevalence of HIV/AIDS, cholera and malaria, Gauteng, the wealthiest province, has one of the lowest numbers of private hospitals.
The prevalence of HIV/AIDS in South Africa can be viewed as geographically divided. Provinces that recorded the highest HIV prevalence were Kwa-Zulu Natal (with the lowest life expectancy in 2011) and Mpumalanga. The Northern Cape and Western Cape recorded the lowest prevalence, having less than 10%. More than half of South African residents with HIV/AIDS are located in Gauteng and Kwa-Zulu Natal.