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by EOS Intelligence EOS Intelligence No Comments

P2P Lending Needs More than Just an Appetite for Investment to Sustain Its Growth

Peer-to-peer (P2P) lending has emerged as a global financial phenomenon. It has revolutionized the way individuals access loans. The innovation of P2P lending has experienced varying degrees of success and turbulence in different regions, notably India, China, and the USA. Understanding the reasons behind the rise and fall of P2P lending across these major markets provides critical insights into the global dynamics of this industry.

P2P lending – good old loans with a modern take

Peer-to-peer (P2P) lending is giving loans through an online platform that connects lenders and borrowers to exchange goods, services, or money directly by eliminating traditional intermediaries such as banks. Financial technology facilitates P2P lending, directly connecting individuals or businesses with investors.

Lenders and borrowers need to register with a P2P platform before conducting any transactions. The registration entails an AI-based evaluation of the borrowers to assess their credit score, employment details, income, and credit history. It also monitors their social media activities, including usage patterns and interactions. Using these assessments, the borrowers’ creditworthiness is determined, categorizing them into various risk tiers and informing the interest rates offered.

Subsequently, lenders can make informed decisions about lending money based on borrowers’ assessed scores. This empowers them to select suitable borrowers and enables borrowers to choose appropriate lenders. The P2P platform charges fees from both parties for its services instead of deriving profit from monthly installments.

To mitigate fraudulent activities, certain regulatory bodies oversee these platforms to ensure compliance with regulations and maintain transparency. For example, P2P lending in the USA is regulated at the federal and state levels. The US Securities and Exchange Commission (SEC) oversees the investors of the P2P lending platforms, while the Federal Trade Commission and the Consumer Protection Financial Bureau oversee the borrowers. In India, all P2P lending platforms must register as Non-Banking Financial Companies (NBFC)-P2P Lenders with the Reserve Bank of India (RBI).

The global P2P lending market is expected to reach US$705.81 billion by 2030 up from US$83.79 billion in 2021, at a 26.7% CAGR during 2022-2030, according to Precedence Research.

In addition to the increasing demand for financial services, factors such as lower operating fees compared to traditional financial services, quicker loan approvals, and the adoption of digitization in the banking sector drive the growth of the P2P lending market.

P2P Lending Needs More than Just Appetite for Investment by EOS Intelligence

P2P Lending Needs More than Just Appetite for Investment by EOS Intelligence

China’s P2P lending – started strong but faced a downturn

China’s P2P lending industry witnessed speedy development since 2007. There were 3,383 P2P lending platforms running in China with around RMB 130 billion (~US$18.2 billion) in combined monthly transactions in January 2016, as per the Home of Online Lending, an organization that collects and assembles P2P data from various sources in China. Founded in August 2007, PPDai or Paipaidai, currently known as FinVolution Group, was the first online P2P lending platform in China. PPDai was listed on the New York Stock Exchange in November 2017.

However, this burgeoning growth of the P2P lending industry in China was unsustainable and short-lived. This was evident from the fact that out of 6,607 P2P lending platforms, 6,277 were closed and problematic, leaving only 330 P2P lending platforms in business in China as of August 2020, as per the Home of Online Lending. As of August 2020, the lenders of the collapsed P2P lending industry of China owed depositors US$115 billion.

There were several Ponzi schemes related to untrustworthy P2P lending platforms enticing potential investors with attractive bonuses for referring family and friends, as reported by the Chinese media by the end of 2015. For example, in early 2015, Ezubao, with 900,000 investors, went bust when it turned out to be a Ponzi scheme with US$9 billion. Some P2P platforms were found creating fictional information about the borrowers in order to create groups of assets, and these platforms utilized funds to fulfill their own business requirements.

Although until early 2016, no regulatory authorities were overseeing P2P platforms in the country, it was believed that the Chinese government was observing the industry closely. Three bodies (The China Banking Regulatory Commission regulating P2P lending business, the Central Ministry of Industry and Information Technology supervising the telecom business of P2P lending, and the Cyber Administration of China developing rules, managing administrative licenses, and control over internet regulation and censorship in China) together announced the Interim Measures on Administration of the Business Activities of Peer-to-Peer Lending Information Intermediaries (“Interim Measures”) in August 2016.

Interim Measures became China’s first regulatory framework for the P2P lending industry. According to the Measures, a P2P lending platform’s scope of business in China is limited to acting as lending information intermediaries. As per the new rules, P2P lending platforms were mandated to establish custodian accounts with registered financial institutions for investor and borrower funds previously held by them. This was done to decrease the risks associated with situations when P2P lending platform owners flee with the investors’ money.

Interim Measures also mandated that P2P lending platforms register with the local financial regulatory body. The Measures provided P2P lending platform owners with a twelve-month timeline for implementing all the mandates. However, there was a delay in the implementation, as the registration and rectification processes were scheduled to be completed by June 2018, but they were not complete as of August 2018.

The exponential growth of P2P lending platforms in China resulted in several crashes due to cash shortfalls, defaults, frauds, and closures, causing massive financial losses for lenders. Such market scandals made it difficult for investors and borrowers in China to survive. They presented difficulties in acquiring financial resources, and the platforms faced a situation where investors started withdrawing their investments, thus bringing about the ultimate crash of the P2P lending industry in China.

Indian P2P lending – bright future fueled by regulators

P2P lending started in early 2014 in India. However, it began gaining significance in September 2017 when the Reserve Bank of India (RBI) decided to regulate P2P lending in the country.

People in India started using online platforms to borrow and lend funds to various untapped markets characterized by less developed infrastructure and lower investment activity. The method of borrowing changed over time. Borrowers who found it difficult to access credit from financial institutions were borrowing money from relatives, friends, acquaintances, lenders, colleagues, and business partners. The revolution took place via the intervention of digital ways of funding the credit ecosystem.

In September 2017, RBI introduced regulatory guidelines that ensured P2P lending through non-banking financial companies (NBFCs). In October 2017, RBI published a different framework for the P2P lending platforms. RBI categorized these rules as NBFC-P2P. The regulatory norms have enabled P2P lending platforms to create adaptable lending and borrowing models, including the development of flexible loan tenures, interest rate structures, and more.

Later, in 2018, RBI published a list comprising names of the first five companies registered with NBFC-P2P lending. The registration list helped ensure a secure, regulated sector and protect the interests of lenders and borrowers. RBI, in one of its regulations, mentioned a cap of Rs.5,000,000 (~US$60,000), which means if lenders invest money above Rs.1,000,000 (~US$12,000) across P2P platforms, they are required to submit a certificate from a practicing Chartered Accountant certifying a minimum net worth of Rs.5,000,000. This also means that the borrower must certify the difference between their assets and liabilities to show their financial strength. The introduction of the cap discouraged many lenders from giving out big loans.

According to RBI, fund transfers between participants on the P2P lending platform should be made through the escrow account mechanism. This means that all transactions will be processed via bank accounts, and cash transactions are strictly prohibited.

RBI mandated that P2P lending platforms be members of the Credit Information Companies, entities that maintain credit-related information about businesses and individuals. This regulation by RBI was welcomed by P2P platforms but separated less powerful players from the P2P market. The inclusion of rules has brought higher transparency, credibility, and stability to P2P lending. However, they have also increased the operation cost for P2P lending platforms and decreased the activities of lenders and borrowers.

All these changes have helped borrowers obtain loans more easily and protected lenders from fraudulent activities. According to IndustryARC, India’s P2P lending market is predicted to reach US$10.5 billion with a CAGR of 21.6% between 2021 and 2026. Market transparency in P2P lending, facilitated by technologies such as blockchain and smart contracts, has contributed to the growth of the P2P lending market.

Government promotion of cashless technology in P2P lending has reshaped the financial sector, gaining significant momentum over the past years. The introduction of AI and machine learning, along with RBI norms, has created a more secure marketplace for investors and borrowers. Innovations and new players in the P2P market are expected to impact the growth of P2P lending in the future.

P2P lending in the USA – star performer driven by technologies

The P2P lending market shows significant growth in the North American market with a larger size, higher revenue, and rapid growth. Several platforms, such as Lending Club (founded in 2006) and Prosper (founded in 2005), supported the growth of the P2P lending market in the USA by making P2P lending easy and secure. These platforms helped in attracting a large number of borrowers and investors. In the USA, the adoption of mobile and digital technologies such as Venmo, which was acquired by PayPal in 2013, and Squash Cash increased customer interest in digital transfer capabilities.

The USA has achieved remarkable success in P2P lending compared to other countries, partially due to the implementation of various payment technologies, including the EMV (Europay, Mastercard, and Visa) smart payment card protocol used as an electronic payment method. This success can be attributed to the presence of adequate legal frameworks and well-defined strategies for generating revenue.

One contributing factor to the rise of P2P lending in the USA has been the emergence and growth of small and medium-sized enterprises (SMEs actively involved in P2P lending activities). These platforms helped reduce the cost of office setups, maintenance, staffing, etc., and thus helped boost the growth of P2P lending.

One of the reasons behind the increase in the P2P lending market was the COVID-19 pandemic in 2020. At a time when major businesses and organizations were facing difficulties regarding finance and operations, P2P lending platforms helped them to raise funds for their operations through online lending platforms such as i2iFunding, Faircent, Lendbox, etc., allowing a direct lending process without the involvement of third-party participants, such as banks.

Technological advancements, such as blockchain, are another reason behind the increase in the P2P lending market in the USA. They eliminated the need for physical branches and reduced operational costs. They reached global audiences such as individuals and businesses in underserved or remote areas. They also helped in reducing the risk of fraud and improve financial transactions. Undoubtedly, the P2P lending market is growing largely thanks to the adoption of new technologies.

EOS Perspective

Peer-to-peer (P2P) lending has shown distinct trends in India, China, and the USA. India and China witnessed a decline in their P2P lending markets due to regulatory hurdles aimed at addressing issues such as fraud and investor protection. Conversely, the USA experienced a surge in P2P lending activities. This uptick can be attributed to a well-established regulatory framework and a sustained appetite for alternative lending solutions. P2P lending platforms in the USA have been able to offer borrowers access to credit while providing appealing investment opportunities to lenders, all while adhering to regulatory standards.

Many new developments in P2P lending are helping the platforms become successful. One such development is the integration of decentralized finance (DeFi), a financial technology that works on a secure distributed ledger. The DeFi technology, born in 2018, aims to create a transparent, open, and permissionless financial system operating on blockchain networks such as Bitcoin or Ethereum.

DeFi in the USA empowers individuals with P2P digital exchange by challenging the centralized financial system by eliminating banks’ fees and other charges. DeFi allows a P2P lending platform to access a global pool of liquidity (which means a collection of digital assets to enable trading on DeFi), reduces costs and risks, and offers more flexible and customized products.

Artificial Intelligence and Machine Learning will continue to be the solutions that transform P2P lending with better data analysis, credit scoring, risk assessments, and fraud detection capabilities. AI will also allow for efficient and more personalized services to both lenders and borrowers.

Regulatory authorities, with their frameworks, have saved several platforms from data breaches, tax compliance issues, consumer protection concerns, and cyberattacks. These authorities, together with industrial associations, will continue to create innovative and adaptive solutions such as sandbox programs (a time-bound, controlled, and live testing environment involving parameters within which the firm must operate).

Looking at the history of some of the key P2P lending markets, it is evident that creating a more robust, secure, and dependable P2P lending ecosystem necessitates technological innovations and establishing a practical regulatory framework to ensure the safety of financial activities.

by EOS Intelligence EOS Intelligence No Comments

Commentary: Europe AI Regulation Deal – Beginning of a New Technological Era?

The proliferation of artificial intelligence (AI) applications in recent years has highlighted the importance of regulatory frameworks to ensure AI’s responsible use. Recognizing this, the EU has become the first global power to pass AI-related legislation. The EU AI Act, considered a watershed moment in today’s digital era, is expected to create ripples worldwide and prompt leaders to take initiatives to control the use of AI.

The AI industry, valued at US$454.1 billion in 2022, is predicted to reach US$2.6 trillion by 2032, according to a 2023 report by Canada/India-based market research company Precedence Research. Although this impressive increase in the use of AI offers immense potential, it has raised numerous concerns about its misuse. Many industry experts have voiced concern about how significantly AI impacts important industries such as education and health, and may eventually alter human lives.

Regulatory bodies and governments worldwide are also now aware of the risks of bias, discrimination, and privacy breaches that come with the unrestricted use of AI. A 2020 study published in Sustainable Development, an interdisciplinary journal, found that unchecked AI poses a threat to the Sustainable Development Goals (SDGs) established by the UN.

The EU took its first step in addressing concerns related to AI in April 2021 when it released the first draft of EU AI regulation. However, this draft was revised after the 2022 release of ChatGPT to include the newer technological advances with a future-proof approach that will enable the law to evolve as technology does.

The EU AI rule uses a risk-based strategy to divide AI systems into categories, namely unacceptable, high, limited, and minimal risk. Systems categorized in the unacceptable risk group will be banned, and those with high risk will undergo a rigorous assessment to understand their effect on fundamental rights and be given a CE mark before their market release.

The limited risk category that fulfills specific transparency requirements should follow EU copyright laws, prepare technical documentation, and release a synopsis of the training materials so the users can make an informed decision. Companies can release minimal-risk systems, such as spam filters and AI-powered video games, without restrictions.

The AI Act has also introduced certain transparency requirements for general-purpose AI (GPAI) models such as Gemini and ChatGPT. For powerful and highly effective models, there are additional risk management requirements, such as maintaining cybersecurity standards, conducting evaluations, assessing and mitigating risks, and reporting serious events.

The EU AI Act has several implications for business across the continent

Many industry experts consider the EU AI Act a significant regulatory tool for overseeing the advancement and utilization of AI technologies throughout the continent. The enforcement of this act is expected to influence significantly the operations, approaches, and competitive environment across several sectors in the EU, as well as intercontinental business with products traded in the European market.

Achieving compliance is one of the main challenges businesses will face with the introduction of the new EU AI law. The law comes with a hefty penalty for non-compliance, with most violations costing businesses €15 million, or 3% of their annual global turnover. Non-compliance concerning banned AI systems can result in fines of up to €35 million, or 7% of the company’s annual turnover. Furthermore, providing false, deceptive, or incomplete information may result in fines of up to €7.5 million, or 1.5% of the total turnover.

Any organization aiming for compliance needs to perform a gap analysis to identify disparities and enhance company processes, policies, and metrics. They must also provide the regulators with accurate, efficient, and timely answers. All these place a substantial organizational and economic burden on the companies.

Another challenge businesses can face is implementing all the changes needed to fill the compliance gap while being consistent with their internal structure. This will require the company to identify the metrics it needs to track to achieve compliance and design new organizational procedures to fulfill this. This should also be done in such a way that it does not hinder other strategic goals, such as innovation, budgetary constraints, etc., placing additional strain on the leadership.

Companies offering multiple AI solutions can face several complicated roadblocks with the implementation of the EU AI Act. Such organizations will be subject to a different set of regulations depending on the risk category of their AI products. This can lead to internal policy confusion.

Slower product development cycles and delays in product releases are other bottlenecks that companies will need to address with the act’s implementation. New AI-powered products, especially high-risk ones, now need to undergo more rigorous evaluation to ensure compliance, which can slow the entire process.

Players can also face challenges in M&A activities with the new regulations. Businesses will now need to spend more time and resources assessing the compliance of their merging partner before proceeding.

There are several opportunities for determined businesses

While the implementation of the EU AI Act does spell several challenges for businesses, it also offers opportunities for interested players. With the new act in place, customers will be able to place more trust in AI solutions. This will enhance the adoption of new AI-based systems.

Determined players can also improve innovation and gain investment with the help of Article 53 of the Act. This section states the possibility of establishing “regulatory sandboxes” that can be set up by one or more member states. These sandboxes offer controlled environments for developing, testing, and validating new AI technologies for a short time under the guidance of a competent authority. This will also ensure that the AI solutions fulfill regulatory compliance.

The EU AI Act offers special support measures to start-ups and SMEs. The compliance requirements for high-risk AI have been modified to make them less burdensome and technically feasible. Start-ups and SMEs also get a proportional cap on compliance infringement fines. This will make it easier for budding businesses in the AI sector to make leaps in innovation and product development.

Interested EU-based players can also receive support for product development through programs such as Testing and Experimentation Facilities, Data and Robotics Hubs, Digital Innovation Hubs, etc. The AI Office, set up by the EU AI Act to oversee the rules and regulations related to GPAI models, has established forums where stakeholders can exchange best practices and contribute to rules of conduct and practice. This can improve participation across industries and enhance inclusiveness.

EOS Perspective

The EU AI Act can be considered a landmark development in the regulation of AI technologies in Europe. It has extensive implications for businesses, society, and the economy on the continent and worldwide. Many industry leaders consider this act a starting point in AI regulation. Other countries are expected to follow in the EU’s footsteps soon and make similar laws curbing the effects of unregulated AI.

The EU AI Act is expected to make AI-based solutions safe and bias-free, with better transparency into their developmental processes. It is also expected to enhance accountability and create a more responsible approach to AI development and deployment.

Businesses, especially SMEs and start-ups, can expect several benefits from this act. Experts predict that with the renewed focus on safety and ethical issues, there will be large-scale development of far more trustworthy and robust AI-based solutions in the future.

by EOS Intelligence EOS Intelligence No Comments

eNaira: Is It Here to Stay or Are Nigerians Going to Say ‘Nay’?

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Although Nigeria boasts about its digital currency launch, there are contradictory opinions about eNaira’s subsequent adoption. The eNaira has the potential to impact Nigeria’s economy positively, however, it is not possible without its widespread acceptance.

CBDC – A global picture

Central Bank Digital Currency (CBDC) is virtual currency or money issued and controlled by a country’s central bank. According to the Atlantic Council, a leading US-based think tank, 130 countries were considering a CBDC as of September 2023, while only 35 countries were exploring a CBDC as of May 2020. This steep rise in the number of countries considering CBDC in a span of just over three years shows an increasing interest in CBDC across the globe. Even more so, some 64 countries are already in an advanced phase of exploration of the currency (development, pilot, or launch phase).

Among the G20 countries, 19 are in the advanced stage of developing CBDC, and 9 out of these 19 G20 countries are in the pilot phase. There are some 11 countries that have launched a CBDC. China’s CBDC is in the pilot stage and is presently reaching 260 million people taking part in this pilot while being tested in more than 200 scenarios, including e-commerce, public transit, and stimulus payments. In Europe, the European Central Bank is currently on course to start its pilot for CBDC, the digital euro.

More than 20 other countries are stepping towards piloting their digital currency in 2023. Countries such as Australia, Thailand, and Russia plan on continuing pilot testing. Brazil and India intend to launch their CBDC in 2024.

eNaira – A choice or compulsion?

eNaira is Nigeria’s digital currency, issued and regulated by the Central Bank of Nigeria (CBN) for retail use. It is a liability of the CBN, similar to coins and cash.

Cryptocurrencies such as Bitcoin and Ethereum are similar to eNaira in terms of the underlying Bitcoin technology. Apart from this, both cryptocurrencies and eNaira are stored in digital wallets and can be used for payments and digital transfers across the globe to anyone with an eNaira account at no cost.

However, what makes eNaira different from Bitcoin or Ethereum is that the CBN has access rights controls over the Nigerian digital currency. Secondly, the eNaira is not a financial asset but rather a digital form of the physical naira, to which it is pegged at parity.

With the release of eNaira in October 2021, Nigeria became the first country in the African continent and second in the world after the Bahamas to launch a CBDC. Major motivations behind launching CBDC in Nigeria included encouraging financial inclusion, improving cross-border transactions, complementing the current payment systems, and enabling diaspora remittances. However, the adoption of eNaira has been low, with only 0.5% of the Nigerian population using CBDC within a year of its launch.

In a rather desperate move to compel its people to adopt eNaira, the government caused cash shortages in the country. This resulted in protests, riots, and unrest among Nigerians. As a result of the currency shortages in early 2022, Nigeria witnessed a 12-fold increase in the number of e-Naira wallets to 13 million since October 2021.

As of July 2023, the value of transactions had also seen a 63% rise to N22 billion (US$48 million) since its launch in October 2021. According to the International Monetary Fund (IMF), 98.5% of the eNaira wallets were inactive one year after the launch of the CBDC, meaning 98.5% of eNaira wallets have not been used even once during any given week. These low levels of activity mirror the low public adoption of eNaira.

eNaira Is It Here to Stay or Are Nigerians Going to Say ‘Nay’ by EOS Intelligence

eNaira Is It Here to Stay or Are Nigerians Going to Say ‘Nay’ by EOS Intelligence

Motivations to launch eNaira: Strong enough to sustain adoption?

CBN conceived multiple advantages of adopting eNaira, such as fostering financial inclusion, facilitating remittances, and minimizing informality in the economy. These serve as motivations for launching eNaira and are expected to take shape with the eNaira becoming more widespread along with strong support of the regulatory system.

Fostering financial inclusion

Currently, eNaira can be used by people with bank accounts, but the idea is to expand the coverage to anyone with a mobile phone, even if they do not have a bank account. Around 38% of the adult population in Nigeria do not have bank accounts. If this section of the adult population could be provided with access to eNaira through mobile phones, Nigeria could potentially achieve 90% financial inclusion.

Facilitating remittances

Nigeria is one of the Sub-Saharan African countries that receives considerable remittances. In 2019, Nigeria received US$24 billion in remittances, which are usually made through international money transfer operators. These operators charge around 1-5% of the value of the transaction as their fee. One of the motivations for launching eNaira is to reduce the costs associated with remittance transfers.

Minimizing informality in the economy

With more than half of the economy being informal, it becomes imperative for the Nigerian government to introduce a digital currency across the country to reduce the informality in the economy and increase the country’s tax revenues. Therefore, eNaira was launched in Nigeria to strengthen the tax base along with obtaining higher transparency in informal payments.

Can Nigeria overcome implementation challenges to spur eNaira adoption?

It comes as no surprise that Nigeria is facing a range of adoption barriers on its journey to eNaira’s widespread implementation. Apart from perceptual barriers such as considering eNaira wallets as deposits at the central bank, which might decrease the demand for deposits in commercial banks, there are cybersecurity risks and operational barriers linked to eNaira. These adoption barriers to Nigeria’s CBDC include a combination of factors such as lack of required tech infrastructure, lack of training of bank personnel managing the process, trust issues, and electricity and internet issues.

Lack of tech infrastructure

The CBN is looking to revamp the technological platform used for eNaira and was in talks for that with a company called R3 in early 2023. CBN is contemplating having complete control over the platform, while eNaira was initially developed in collaboration with a fintech multinational called Bitt. The change of technology platform vendor in less than two years might suggest a lack of vision of CBN regarding the technological infrastructure necessary for the seamless adoption of eNaira.

Lack of training

The CBN is expected to oversee the ledger and manage the system, while other financial institutions, such as banks, are to provide users with access to CBDC wallets. The bank staff is required to onboard users to the eNaira platform. However, it is observed that the bank staff is not sufficiently trained to be able to seamlessly bring users on board. This, in turn, negatively impacts the adoption of CBDC.

Trust issues

Nigeria has been considered a country with high money laundering and terrorist organizations funding risk (ML/TF). In February 2023, the Financial Action Task Force (FATF), a global money laundering and terrorism funding inspection organization, put Nigeria on its grey list owing to Nigeria not having adequate measures to curb such activities. Similarly, Basel Institute of Governance, a non-profit organization focused on improving governance and preventing corruption and other financial crimes, in its 2022 global ranking on ML/TF risks, placed Nigeria 17th out of 128 countries, a high spot indicating a significant risk of ML/TF.

In the current design of CBDC in Nigeria, the CBN is equipped to monitor all users’ transactions using eNaira, potentially allowing it to detect and curb ML/TF activities and improve Nigeria’s standing in the risk rankings. However, this has turned out to be a double-edged sword in implementing eNaira. The high level of supervision of all transactions has brought apprehension amongst potential users in Nigeria, most of whom believe that eNaira was developed by the government to monitor the monetary transactions, breaching their right to privacy and potentially giving the government a tool to control them. This lack of trust significantly hampers the adoption of the CBDC in Nigeria.

Electricity and internet issues

With around 92 million people not having access to power in a population of 200 million, Nigeria has one of the lowest electricity access rates globally, as per the Energy Progress Report 2022 published by Tracking SDG 7. At the same time, the internet penetration in Nigeria stands at 55.4% in 2023. Seamless internet connectivity and power access are some of the critical prerequisites for the smooth implementation of the eNaira in Nigeria.

What would give eNaira adoption a much-needed push?

As the challenges to widespread adoption of the eNaira are multipronged, finding solutions to overcome the implementation challenges is not easy or quick.

One of the main infrastructural challenges, inadequate power and internet access, should be among the first to be addressed. One way to approach it is to create offline access to the eNaira platform. To achieve this, the CBN launched the Unstructured Supplementary Service Data (USSD) code for eNaira, meaning that Nigerians without internet-enabled phones can perform transactions with eNaira.

To facilitate rapid and seamless adoption of the eNaira, the CBN must make the CBDC available to everyone with a mobile phone. More and more people should be encouraged to use eNaira by incentivizing them through rebates while paying income tax. Another incentive example dates back to October 2022 when CBN offered discounts if people used eNaira to pay for cabs.

EOS Perspective

The eNaira has the potential to have a significant impact on the Nigerian economy. As transactions using eNaira are fully traceable, more widespread adoption of eNaira is expected to expand the country’s tax base by bringing higher transparency in payments, especially in informal markets. It will undoubtedly result in higher tax revenue, a development welcomed by the government.

With US$24 billion in remittance receipts in 2019, Nigeria is considered one of the key remittance destinations in Sub-Saharan Africa. As remittances are currently burdened with a 1-5% charge of the transaction value, removing these costs through the adoption of eNaira would bring more remittance income to the population and, indirectly, more capital to the Nigerian economy.

With the expanded tax base, cheaper and higher inflows of remittances, facilitated retail payments, welfare transfers, etc., the impact of the eNaira on the Nigerian economy is likely to be quite considerable. Indeed, at the time of launch, the CBN estimated that the eNaira should increase Nigeria’s GDP by US$29 billion over the first 10 years, contributing to the country’s economic growth and development. With the implementation challenges encountered so far, it is clear that these estimations were overly optimistic. Still, how well the CBN can do its homework and undertake well-directed steps to navigate the challenges remains to be seen.

by EOS Intelligence EOS Intelligence No Comments

Future of Animal Medicine Will Be 3D-printed

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Additive manufacturing, better known as 3D printing, attracted the attention of various healthcare sectors, as it has wide applications and provides beneficial results due to its extensive flexibility and customization. 3D printing is becoming more popular in veterinary medicine owing to its revolutionary ability to build a 3D model of many objects using computer-aided design (CAD) software and successfully utilizing it in animal health ranging from implants to prostheses to tissue replacements. The 3D printing market in animal medicine is therefore projected to witness considerable growth, predicted at 15.24% CAGR during the forecast period of 2023-2031. Like almost all technologies, 3D printing in veterinary medicine has its advantages and a few challenges that need consideration.

3D printing technology is rapidly growing, including in veterinary medicine, as it continues to improve and become more accessible. Veterinarians are largely utilizing 3D printing technology because of the transformative approach it offers, while the decreasing cost of printers makes it feasible to develop the most desired model easily within a relatively short period of time.

3D printing finds application in a range of animal care areas

3D printing is a promising technology used to improve animal health and life span by treating disabilities developed due to events such as accidents or other medical conditions. Given its versatility, 3D printing in veterinary medicine is used for a broad range of applications.

Animal prosthetics and orthotics

In veterinary prosthetics and orthotics, 3D printing is used mainly for the development of bone structures, complex implants, and surgical guides. One of the first cases of 3D-printed prosthetics used in an animal was noted in the USA, where Derby, the dog, was born with short forelegs and no front paws, making him unable to walk. In December 2014, with the use of 3D scanning software, Derby was equipped with 3D-printed prosthetics, allowing him to start running and walking freely. Other notable cases of successful 3D-printed prosthetics applications in animals include Romina, a whippet who lost her leg in an accident in 2016. Her leg was fitted with a 3D-printed limb by specialists at Mexico City’s Veterinary Hospital, allowing the dog to walk again.

3D printing in surgical models planning

3D printing technology is ideal for surgical model planning since it allows surgeons to examine and determine bone structures based on a visual examination as the initial stage in surgical planning. Vets can directly quantify the deformity by doing preoperative assessments, however, sometimes, visual inspection of complex bone conformation might be challenging. Furthermore, 3D printing technology in surgical planning is a useful resource to help pet owners better understand their animals’ health issues and planned treatment options.

Future of Animal Medicine Will Be 3D-printed by EOS Intelligence

Future of Animal Medicine Will Be 3D-printed by EOS Intelligence

Education and training

3D printing is one of the most practical and efficient methods for the production of exact anatomic models needed at learning and training facilities across all levels of the veterinary education system. Students can examine and practice on realistic models, gaining a better understanding of complex anatomical structures and surgical techniques. This technology enhances the learning experience and prepares future veterinarians for various scenarios. The list of universities that use 3D printing in their veterinary medicine program is long and expanding and currently includes US-based institutions such as Ohio State University, University of Pennsylvania, Pennsylvania State University, Cornell University, North Carolina State, University of Tennessee, as well as University of Nottingham and University of Derby in the UK, Satbayev University in Kazakhstan, Indian Veterinary Research Institute and Tamil Nadu Veterinary and Animal Sciences University in India, University of Ghent in Belgium, Utrecht University in the Netherlands, University of Bern in Switzerland, University of Glasgow in Scotland, and University of Veterinary Medicine Vienna in Austria, to name a few.

3D printing implants

Implants developed using 3D printing technology are customized to enhance the quality of an animal’s life and are particularly useful in oncological cases, where massive excision requires implant structures to replace removed tissues and restore their functions. A wide range of implants has been created utilizing common biocompatible materials such as titanium and nylon, which have demonstrated a considerable success rate in a variety of complex procedures ranging from skull flap and limb replacement to tibial tuberosity advancement implants. To create medical implants, veterinarians employ powder bed fusion, a metal 3D printing method, which allows them to create implants in a variety of desirable shapes and structures.

3D-printed masks

3D-printed masks are useful and essential to cure wounds from surgery and help to recover from fractures and bone destruction. The 3D-printed mask helps animals recover from injuries without the risk of reopening a wound or dislocating their bones. In August 2017, a female black-breasted leaf turtle in Tennessee suffered a wound on one of her nostrils and was having difficulty eating. To permanently repair the damage, a 3D-printed face mask was created to cover the whole wound region without blocking eyesight or limiting her ability to move her head.

Dynamic drivers power global 3D printing market growth in animal medicine

The global 3D printing in veterinary medicine market size is expected to increase from USD 2.8 billion to USD 11 billion and is estimated to grow by 15.24% CAGR during the forecast period of 2023-2031.

The North American market is expected to be the leading market due to high animal adoption rates, increased pet expenditures, and the abundance of veterinary facilities and clinics in the region. The European market is expected to be the second most prominent, with an increase in the number of experienced veterinarians and R&D investment, particularly in animal health, factors that are likely to drive market expansion. The Asia Pacific market is experiencing a moderate growth rate and is expected to continue showing promising growth in the coming years. This can be attributed to the increasing trend of pet adoption, particularly in countries such as Japan and Australia, where owning a pet is viewed as a symbol of social status. Australia has the highest pet ownership rate in the world, with 63% of the population owning a pet.

The major growth factors that are globally boosting 3D printing in veterinary medicine include wide applications in animal care as the technology enables the creation of patient-specific solutions and a cost-effective approach that varies from a few hundred to around a thousand dollars, which is less than traditional manufacturing methods for veterinary implants. Rapid prototyping is another major growth driver for 3D printing since it allows veterinarians and researchers to quickly prototype and test ideas, resulting in more efficient development procedures. 3D printing also improves patient outcomes by providing personalized solutions that result in better-fitting prosthetics, implants, and devices, which can improve an animal’s quality of life and overall health.

Extensive R&D efforts contribute to the market players’ growth

The global 3D printing market in veterinary medicine is competitive and includes a diverse range of established and startup companies that are actively contributing to advancements in veterinary care. Among the companies providing 3D printing solutions in animal medicine, some of the few leading players include Formlabs, Materialise, Med Dimensions, VET 3D, BTech Innovation, M3D ILAB, DeiveDesign, and Cabiomede. Given the relatively early stage of development that the market is currently at, it is not surprising that R&D plays a vital role in most players’ operations and growth. Many players work toward offering more comprehensive solutions to end-user entities through strategic agreements, partnerships, and acquisitions.

3D Systems Corporation, headquartered in the USA, is considered the leading manufacturing company in this market. It provides medical and dental solutions, as well as veterinary applications. 3D Systems provides a diverse array of products and services that have been used to produce anatomical models, implants, prosthetics, and surgical guides for animals. The company uses various 3D printing technologies such as film-transfer imaging, SLA, SLS, and direct metal printing. It outsources certain printer assembly, printer production, and refurbishment activities to selected organizations and suppliers. With the advancing technological changes in 3D printing, the company claims to have been focusing on ongoing R&D programs to develop new and enhance existing printers and printing materials.

Another market leader is Stratasys, an American-Israeli manufacturer with a global presence in the 3D printing industry for animal medicine. The company offers a range of 3D printing solutions, including 3D printers, materials, Fused Deposition Modeling (FDM), and PolyJet technologies. These technologies have been effectively utilized in veterinary medicine to create patient-specific models and surgical guidance for preoperative planning. Stratasys is another player that claims to put investment in R&D to the forefront, to broaden its capabilities and offerings in the veterinary field. The company collaborates with hospitals and universities, such as Colorado State University’s veterinary hospital and AniCura, a European network of animal hospitals and clinics, to advance the use of 3D printing in animal care and creating patient-specific implants. They have been actively integrating this technology into their veterinary practices.

Materialise is a provider of 3D printing software solutions and complex 3D plastic printing services for animal medicine. It employs technologies such as FDM, Multi-Jet Modeling (MJM), and vacuum casting. The company provides custom implants, 3D visualization, and orthotics surgical solutions. Materialize supplies to veterinary research institutes, hospitals, and major medical device manufacturing companies. The company’s software section offers software-based applications and related technology, such as CAD packages and 3D scanners. It has a strong presence in the Americas and offers worldwide coverage to its clients.

Another two companies worth mentioning are VetCT and Wimba. VetCT, a US-based company, specializes in veterinary imaging and has developed expertise in producing 3D reconstructions from a variety of imaging modalities. The company provides 3D modeling and printing services to veterinarians to improve treatment knowledge and planning. Wimba, headquartered in Poland, provides a variety of personalized animal 3D and 4D printed orthopedics items by applying unique measuring techniques and specialized software, resulting in products that are more durable and lightweight.

All these players in the 3D printing market for animal care continue to develop and advance in their specialized product offerings. It can be expected that this specialization will continue and deepen, with the companies trying to carve a unique niche for themselves, especially as the competitiveness in the market is likely to intensify.

A range of challenges continues to put a brake on 3D printing’s mainstream use

3D printing technology has made remarkable advancements in animal medicine, offering immense potential to transform veterinary practices. However, several challenges must be overcome before 3D printing may successfully become main stream in animal treatment.

One of the significant barriers to the adoption of 3D printing technology in clinical practice is its time-consuming nature. The process of creating a replica model and the printing itself are all complicated procedures that can take anywhere from three days to several weeks. This can be a significant challenge for veterinarians who need to provide prompt and effective treatment for their patients.

Creating precise 3D models for printing often relies on medical imaging techniques such as CT scans or MRIs. However, generating high-quality images of animals, especially exotic and small species, can be challenging. Movement during scanning, anesthesia risks, and imaging artifacts can affect the quality of the 3D model. This can lead to inaccuracies in the printed model, leading to ineffective treatment and potential harm to the animal.

The integration of 3D printing into the existing veterinary medicine process presents a significant challenge. The use of 3D printing technology involves a multi-step process, including imaging, model generation, and printing to create anatomical models. Coordination between veterinarians, radiologists, and 3D printing experts is essential to ensure that the process runs smoothly.

The selection of appropriate materials, such as plastics, living cells, titanium, resins, glass, nylon, and metals, is critical for 3D printing in animal medicine, as the availability of materials that offer the required properties, such as biocompatibility and durability for model development is limited and not all materials can be temperature controlled enough to allow 3D printing. Furthermore, many of these printing materials cannot be recycled and are quite unsafe.

The field of animal medicine has greatly benefited from the advancements in 3D printing technology, particularly in the development of personalized implants and prosthetics. However, the diverse anatomies of animals present unique challenges in designing and printing these specialized products. Animals vary greatly in size, shape, and structure, which makes it more complex to create products that fit well and function optimally. This requires specialized skills and software tools such as CAD, as well as a deep understanding of animal anatomy.

In addition to the design and implementation challenges, regulatory authorization is required for the use of 3D-printed products and implants in animal medicine, which includes approval or clearance process, clinical data, post-market surveillance, international harmonization, labeling, and instructions. The safety and efficacy of these products must be thoroughly tested and verified before they can be used in clinical settings.

Furthermore, ethical concerns about the use of animals in medical research must be addressed. It is important to ensure that the use of 3D-printed products and implants does not cause harm or unnecessary suffering to animals. Ensuring the long-term biocompatibility of 3D-printed implants and prosthetics in animals also requires thorough testing and monitoring. Animals have distinct physiological reactions and potential differences in healing processes that must be considered. The use of 3D-printed products must be carefully evaluated to ensure that they do not cause adverse effects or complications

EOS Perspective

3D printing technology has emerged as a promising area in veterinary medicine, providing customized solutions for a wide range of animal health issues. Despite facing some challenges, the technology’s ongoing advancements and increased accessibility are expected to drive significant growth in the market in the future.

With its ability to fabricate precise, patient-specific implants, prostheses, and tissue replacements, 3D printing has the potential to revolutionize veterinary medicine, enhancing outcomes and improving the quality of life for animals. Incorporating 3D printing into animal medicine requires collaboration among veterinary doctors, imaging specialists, 3D printing experts, regulatory authorities, and ethicists.

Nevertheless, there is still a significant amount of work to be done, and addressing these challenges will require substantial effort, innovative solutions, and thoughtful consideration. This is a dynamic and promising field that beckons thorough exploration, continued innovation, and the unwavering commitment of professionals to enhance the global standard of animal care. While the full extent of 3D printing’s impact on veterinary medicine remains to be seen as research and development continue, the initial outcomes are undoubtedly encouraging.

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Commentary: EU Push the Maritime Operators to Boost Cybersecurity

Cybersecurity in the maritime sector is of critical importance as sea routes accounted for about three-fourths of the EU’s imports and exports in 2022. The new Network and Information Systems Security Directive (“NIS2 Directive”) aiming to strengthen cybersecurity is expected to enter into force from October 2024 and will impact maritime companies with more than 50 employees or an annual revenue of over €10 million. The NIS2 directive, which will replace and repeal the NIS directive, expands the scope to cover a larger number of companies in the sector as it includes both medium and large-size companies.

Companies may feel burdened by strict NIS2 requirements

To comply with the new requirements, the companies would need to make cyber risk management a focal point for every business strategy and make cybersecurity measures a part of day-to-day operations. NIS2 adoption will not only demand additional investment but also change the way the business is done.

  • Increase in cybersecurity investments

A total of 156 entities in the water transport sector were subject to the NIS directive in July 2016, as it focused mainly on large enterprises. Under NIS2, this number is likely to increase to 380. In particular, the number of port and terminal operators covered in NIS2 will increase significantly. A senior IT executive from Port of Rotterdam indicated that while NIS covered only a few port stakeholders (~5 companies), more than a hundred companies would need to comply with NIS2.

European Commission indicated that the companies already covered under the NIS directive would need to increase their IT security spending by 12%, while for the companies that were not covered previously but would be covered under the NIS2 framework, the IT security spending would need to be increased by up to 22%.

Frontier Economics, a consultancy firm based in Europe, estimated that the costs of implementing the NIS2 regulation in medium and large enterprises across the water transport sector would be about 0.5% of the total annual revenue across the medium and large water transport companies, which amounts to more than €225 million per year.

  • Enhancement of OT security

The advent of digitization has resulted in rapid convergence of operational technology (OT) with IT systems, leaving critical OT infrastructure vulnerable to cyberattacks. OT helps monitor and control mechanical processes, making them particularly important for the safe operation of ports and other aspects of the maritime sector.

ENISA, the European Union Agency for Cybersecurity, indicated that from January 2021 to October 2022, ransomware attacks on IT systems were the most prominent cyber threat facing the transport sector and warned that ransomware groups are likely to target OT systems in the near future. NIS2 imposes stringent requirements for critical infrastructure entities, including maritime companies, to beef up cybersecurity from the perspective of both IT and OT.

Traditionally, maritime companies have considered cyber security primarily in the context of IT systems, but now there is a higher focus on OT cybersecurity, and the NIS2 is going to ensure investment momentum in this space. For instance, the Maritime Cyber Priority 2023 report indicated that over three-fourths of the respondents suggested that OT cyber security is a significantly higher priority compared to two years ago.

While NIS2 adoption may seem taxing, benefits are likely to follow

Like any new regulation, the adoption of NIS2 comes with additional costs and implementation hurdles, however, the consequent benefits are likely to outweigh the challenges.

  • Harmonization of cybersecurity requirements

In August 2023, a senior executive from Mission Secure, an OT cyber security solutions provider, indicated that maritime operators would welcome stringent cybersecurity standards. The maritime industry operates on thin profit margins, making it difficult for companies to invest more in cybersecurity than competitors. Implementation of NIS2 would set cybersecurity standards harmonized across the EU and thus level the playing field in terms of spending on cybersecurity while reducing the risks and losses associated with cyberattacks.

  • Improved competitiveness

A 2020 study by ENISA suggested that the EU organizations’ cybersecurity spending is, on average, 41% lower than of their US counterparts. NIS2 is expected to drive the necessary investments in cybersecurity.

Moreover, given the international nature of the maritime industry, the adoption of the NIS2 directive will help the operators keep up with similar cybersecurity regulations around the world. For instance, Australia reformed the Critical Infrastructure Protection Act in 2022 to address the evolving cyber threat landscape. The UK, while no longer part of the EU, is in the process of revising the cybersecurity regulation for critical infrastructure operators in line with NIS2.

EOS Perspective

Upon implementation of NIS2, maritime operators will need to invest in more effective cybersecurity requirements, potentially increasing costs in the short term. Despite this, the increased investment will result in a more secure and resilient industry in the long run, and companies that are able to invest heavily in security are going to gain a competitive advantage over those that are not able to do so.

Digitization and connected technology in the maritime sector are evolving faster than its ability to regulate it. Hence, the maritime sector should view NIS2 as just another measure to elevate the cybersecurity framework. Companies need to be agile and flexible to adapt to the evolving cyber threat landscape.

by EOS Intelligence EOS Intelligence No Comments

Commercial Nuclear Fusion – Reality or a Fairy Tale?

Nuclear fusion has recently gained attention as a potential source of clean energy. It was a result of the US National Ignition Facility in California achieving a major milestone in December 2022 in which researchers were able to produce more energy than was used to ignite it for the first time. Several countries are cooperating in the world’s largest fusion experiment project called ITER, focused on the construction and operation of an experimental fusion reactor located in France. Large-cap companies such as Google and the ministries regulating energy policies across the globe are also investing in fusion energy projects and start-ups to promote fusion energy generation. Despite huge investments, commercializing fusion energy still has a long way to go due to certain technological and operational challenges associated with the generation of this type of energy.

Ever-increasing carbon emissions due to the ongoing rise in energy consumption are driving the need for accelerating energy generation from renewable sources. As of October 2022, over 40% of global carbon emissions were caused by power generation. As per the International Energy Agency, carbon emissions from energy generation increased by 0.9% in 2022, in comparison with 2021, to reach 36.8GT.

Additionally, the energy crisis caused by the Russia-Ukraine war, particularly in Europe, further augmented the need for energy generation using renewable sources. The surge in energy demand from households and industries is putting pressure on the existing energy supplies, thus resulting in high energy prices.

So far, solar and wind energy sources have been prominently used across countries to meet the rapidly increasing energy demand. Nuclear fusion is another alternative renewable source as it does not emit carbon emissions or produce long-lived radioactive waste products, unlike nuclear fission.

Nuclear fusion is an energy-intensive process and requires high temperatures for fusion reaction. In the nuclear fusion process, energy is released by combining two atomic nuclei into one heavier nucleus. The released energy is then captured and converted into electricity by a fusion machine. This process is also the key source of energy in the sun and other stars.

Nuclear fusion releases around four million times more energy as compared to coal, gas, or oil, and four times more than nuclear fission technology. Nuclear fusion can provide energy to an extent that can power up homes, cities, and whole countries.

Current state of the nuclear fusion energy

The potential of generating nuclear fusion energy has been recognized since the 1950s. Countries across geographies have been involved in nuclear fusion research, led by the EU, USA, Russia, and Japan, along with vigorous programs underway in China, Brazil, Korea, and Canada. Various experimental fusion devices have been designed and constructed to advance and transform the way fusion energy is generated. These include tokamaks, stellarators, and laser-based technology devices. Tokamaks and stellarators have been used more commonly for fusion energy research experiments.

Some of the tokamaks and stellarators built across countries for generating fusion energy include the Joint European Torus (JET), started in the UK in 1978, the Wendelstein 7-X stellarator, started in Germany in 1994, Korea Superconducting Tokamak Advanced Research (KSTAR) started in South Korea in 1995, the Mega Amp Spherical Tokamak- (MAST) initially started in the UK in 1997 and further upgraded to MAST-U in 2013, and Experimental Advanced Superconducting Tokamak (EAST) started in China in 2000, among others. Six countries, including China, India, Japan, Korea, Russia, the USA, as well as the EU, are cooperating in the world’s largest fusion experiment, ITER, an experimental fusion reactor currently under construction in France through EURATOM, the European Atomic Energy Community. ITER idea was first launched in 1985 and established in 2007. Its first experiment was scheduled to start in 2025 but is delayed due to Covid-19 disruptions. It is aimed at producing 500MW of fusion power from 50MW of input heating power.

Further, in 2017, China launched the China Fusion Engineering Test Reactor (CFETR) project as a follow-up to the ITER. This tokamak device is aimed at producing an extremely powerful magnetic field to confine plasma and generate fusion energy. This magnetic field can contain and control hydrogen gas ten times hotter than the core of the sun. CFETR is aimed at producing a peak power output of 2GW once completed in 2035, bridging the gap between scientific experiments and commercial use.

Extensive progress has been noticed in studying laser-based technology for fusion energy generation. Some of the facilities that use laser technology to produce fusion energy include the National Ignition Facility (NIF) at the Lawrence Livermore National Laboratory (LLNL) in the USA and the Laser Mégajoule (LMJ) in France.

The International Atomic Energy Agency (IAEA) also supports its member states in research activities related to fusion energy generation. It also organizes various workshops on fusion power plant concept demonstrations, technical meetings, and coordinates research activities.

Nuclear Fusion – Reality or a Fairy Tale?by EOS Intelligence

Nuclear Fusion – Reality or a Fairy Tale? by EOS Intelligence

Some of the breakthroughs achieved in fusion energy experiments to date

There has been significant progress in the research and development activities focused on nuclear fusion energy generation. Researchers are continuously emphasizing optimizing the condition of plasma through changes in density, temperature, and confinement time to achieve the required level of performance for a power plant. Several nuclear reactors were able to sustain high temperatures during the fusion process. For instance, in January 2022, the EAST reactor in China sustained temperatures of 126 million degrees Fahrenheit, which is nearly five times hotter than the sun, for 17 minutes, and thus, broke the record for longest sustained nuclear fusion.

In February 2022, the Joint European Torus (JET) achieved a record performance for sustained fusion energy of 59MJ over five seconds.

Also, in September 2022, the Korea Superconducting Tokamak Advanced Research (KSTAR) experiment achieved plasma temperatures of 120 million kelvins for up to 20 seconds, a key demonstration of simultaneous high temperatures and plasma stability.

Recently, in December 2022, a major breakthrough was achieved at the US National Ignition Facility in California by using inertial confinement fusion, which released more energy than was pumped in by the lasers for the first time in the world. The laser shot released 3.15MJ of energy in comparison with the 2.05MJ pumped to the hydrogen isotope pellet by lasers. This breakthrough is likely to pave the way for abundant clean energy in the future.

Breakthroughs driving further investment in fusion energy R&D

Breakthroughs achieved over the past years in various projects have attracted significant investment by both the government and private sector in the research and development of fusion energy. For instance, in February 2023, Israel’s Ministry of Energy (MoE) proposed to provide US$11.5 million to establish a national nuclear fusion institute in Israel. This initiative includes major universities of Israel, namely the Hebrew University of Jerusalem, Ben-Gurion University of the Negev, the Technion and Tel Aviv University, the Weizmann Institute of Science, as well as NT-Tao, an Israel-based start-up which is engaged in the development of a compact system for nuclear fusion.

Similarly, in October 2022, the UK government announced to provide US$249.6 million of funding for the Spherical Tokamak for Energy Production (STEP) project’s first phase, which will include concept design by the UK Atomic Energy Authority by 2024. STEP is a program aimed at designing and constructing a prototype fusion energy plant by 2040.

In March 2022, the US Department of Energy (DOE) proposed to provide around US$50 million of federal funding to support US scientists involved in conducting experimental research in fusion energy science. Of this, US$20 million was to support tokamak facilities and US$30 million to support fusion research to improve the performance of fusion and increase the duration of burning plasma. In addition to this, the US government’s budget for the financial year 2023 included US$723 million for the Office of Science Fusion Energy Sciences research in enabling technologies, materials, advanced computing and simulation, and new partnerships with private fusion efforts. This amount included US$240 million for the ongoing construction of ITER tokamak. Also, the budget for the financial year 2024 includes US$16.5 billion to support climate science and clean energy innovation, including US$1 billion to advance fusion energy technology.

Private funding in fusion companies has also increased significantly in the recent past. As per the Fusion Industry Association Report 2022 published in July, private sector funding amounted to about US$4.8 billion in total, witnessing an increase of 139% since 2021. Fusion companies also received an additional US$117 million in grants and other funding from governments. Big resource groups such as Equinor, based in Norway, Google, and Chevron, based in the USA, have also invested in fusion energy research. For instance, in July 2022, Chevron, together with Google and Japan-based Sumitomo Corporation, invested in TAE Technologies, a US-based nuclear fusion start-up, in a US$250 million fundraising round to build its next-generation fusion machine.

In addition to this, entrepreneurs, including Bill Gates and Jeff Bezos, are also providing financial support. In December 2021, Commonwealth Fusion Systems (CFS) raised around US$1.8 billion in series B funding from various key investors, including Bill Gates, DFJ Growth, and Emerson Collective, among others, to commercialize fusion energy.

Companies engaged in nuclear fusion energy generation

More than 35 companies are engaged in fusion energy generation for commercial use, such as Tokamak Energy, General Fusion, Commonwealth Fusion Systems, Helion Energy, Zap Energy, and TAE Technologies, among others. These fusion companies are increasingly emphasizing collaborations and experimenting with new technologies to produce fusion energy and make it available for commercial use.

In March 2023, Eni, an energy group based in Italy, and Commonwealth Fusion Systems (CFS) based in the USA, a spin-out of the Massachusetts Institute of Technology (MIT), signed a collaboration agreement aimed at accelerating the industrialization of fusion energy.

In February 2023, TAE Technologies achieved a breakthrough in its hydrogen-boron fusion experiment in magnetically confined fusion plasma. This experiment was a collaboration between Japan’s National Institute for Fusion Science (NIFT) and TAE Technologies.

Also, in February 2023, Tokamak Energy proposed to build a new fusion energy advanced prototype at the United Kingdom Atomic Energy Authority’s (UKAEA) Culham Campus, UK, using power plant-relevant magnet technology. It also built the first set of high-temperature superconducting magnets for testing nuclear fusion power plants. This supermagnet can confine and control extremely hot plasma created during the fusion process.

Certain breakthroughs achieved over the years in the nuclear fusion energy field have encouraged the entry of various start-ups across geographies. For instance, Princeton Stellarators, a US-based start-up focused on building modular, utility-scale fusion power, was founded in 2022. Another start-up named Focused Energy, a Germany-based fusion company, was founded in 2021 to develop a fusion power plant based on laser and target technology. In September 2021, the company raised US$15 million in seed funding led by Prime Movers Lab, along with additional investment from various entrepreneurs.

Start-ups are also emphasizing raising funds to create new fusion technologies and make a significant impact on the industry. In February 2023, NT-Tao, an Israel-based nuclear fusion start-up founded in 2019, raised US$22 million in a series A funding round aimed at developing a high-density, compact fusion reactor to provide clean energy.

Additionally, in January 2023, Renaissance Fusion, a France-based start-up founded in 2020, raised US$16.4 million in a seed funding round led by Lowercarbon Capital. The company is engaged in the development of a stellarator reactor for fusion energy generation.

Challenges to nuclear fusion energy generation

Although a lot of companies and governments across geographies are investing in nuclear fusion energy generation experiments, building full-scale fusion-generating facilities requires advanced engineering, advanced vacuum systems, and superconducting magnets. One of the key challenges in the fusion process is the requirement of extremely high temperatures to produce energy. Also, it becomes difficult to control plasma at such high temperatures.

Additionally, the lack of availability of materials that can extract heat more effectively while withstanding their mechanical properties for a longer duration is another challenge affecting the fusion energy generation process.

Moreover, fusion research projects are also facing capital and financing challenges due to high upfront costs, return uncertainty, and long project duration. The capital investment involved in building and operating a fusion reactor is high due to complex technology that requires significant investment in R&D, high energy requirements, use of advanced materials, and regulatory requirements aimed at ensuring the safety and low environmental impact of the fusion reactor. The cost of building a fusion reactor ranges between tens to hundreds of billions of dollars. It can vary depending on various factors such as size, design, location, materials, and technology used.

Since fusion energy is a new technology, there is uncertainty about when nuclear fusion will become a viable and cost-effective energy source, such as other energy sources, including wind and solar. This makes it difficult for investors to invest in fusion projects and predict the return on investment.

However, ongoing research and development activities aimed at building advanced, highly efficient, and cost-effective fusion reactors and commercializing fusion energy generation at a large scale are likely to overcome these challenges in the long term.

EOS Perspective

Accelerating climate crisis is driving the investment in nuclear fusion research and development as it does not create carbon emissions and long-lasting nuclear waste products. Over the past several years, various fusion research projects, university programs, and start-ups have achieved breakthroughs in the fusion energy field. The most recent breakthrough at the US National Ignition Facility in California, which released more energy than was pumped in by the lasers, has paved the way to the nuclear fusion gold rush and sparked excitement among investors, companies, and researchers.

Many fusion companies, such as Commonwealth Fusion Systems and TAE Technologies, are claiming to exceed breakeven by 2025 and commercialize fusion energy by 2030. Billions of dollars have been invested in nuclear fusion energy generation experiments but no company or projects have been able to achieve breakeven yet.

Several new fusion projects are planning on using advanced materials and putting a new generation of supercomputers to tweak the performance of ultrahigh-temperature plasma, but commercializing fusion energy is still far from reality. Moreover, the fusion process is very complex, requires extreme temperatures for fusion reactions, and involves huge energy costs. Thus, alternative clean energy sources such as wind and solar will likely remain the near-term methods to meet sustainable energy demand. At the same time, it should be expected that the increasing government support and investment by large cap organizations and entrepreneurs are likely to help set up viable fusion power plants in the future.

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Commentary: Microsoft-Activision Blizzard Deal – A Potential Game-changer in the Gaming Industry

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Gaming industry is booming, with a significant surge in growth occurring during the 2020-2021 pandemic, when millions of people turned to games during lockdowns. The industry is currently worth US$184 billion and is expected to reach over US$200 billion by 2025.

The market is very competitive, with a need for considerable investment and time for publishers to create successful games and for companies to develop consoles that offer advanced features and an attractive catalog of games. This is pushing players towards increased consolidation to achieve economies of scale and lower risks and to strengthen their position in the market. More than 650 gaming M&A or investment deals were announced or closed in the first six months of 2022.

Out of the numerous M&As that have recently occurred in the industry, Microsoft’s acquisition of Activision Blizzard, the maker of the world’s most popular games such as Call of Duty, Warcraft, and Candy Crush, is anticipated to make a substantial impact on the market. Microsoft announced its intent to acquire Activision for US$68.7 billion in January 2022, which was going to be the largest acquisition in the gaming industry to date. The consolidation of two strong players in the industry – Microsoft being the manufacturer of the Xbox gaming console and Activision being the publisher of many popular games – could offer users a large catalog of games and improve gaming experience and cloud-gaming services. However, it has also raised a concern that this could suppress the competition in the market of consoles, gaming subscriptions, and cloud-gaming. Many regulators across the world have blocked the deal, including the US Federal Trade Commission (FTC) and the UK’s Competition and Markets Authority (CMA). Microsoft is currently trying to get approval from the regulators.

How does the deal benefit Microsoft?

If the deal gets approved, it will turn Microsoft into one of the top three video game publishers, right behind its rival Sony. This would enhance Microsoft’s games catalog with Activision’s games, making Xbox’s choice more attractive than Sony’s PlayStation. Microsoft would also be able to enter the mobile gaming market with Activision’s mobile games, such as Candy Crush and King. This opens a large market segment, previously unaddressed by Microsoft, a segment that accounts for 50% of the total gaming market. Microsoft is planning to open Xbox’s mobile game store to compete with Apple and Google game stores.

As users increasingly prefer gaming subscriptions and cloud gaming services over physical DVDs, it gives an added advantage for Microsoft to own some of the most popular gaming titles and offer attractive subscriptions on its platform. Currently, Microsoft holds 60-70% of the global cloud gaming services market and could further squeeze into the shares of other companies, such as Google, to dominate the market.

The company would also be able to venture into metaverse and Non-Fungible Token (NFT) games using technological and newly acquired game development capabilities.

What does this deal mean for gamers? 

The Xbox Game Pass subscribers would benefit from the added list of Activision Blizzard games, which would be incorporated into the existing catalog. However, it is unclear whether Microsoft could make future games developed by Activision unavailable on other consoles, such as Sony PlayStation and Nintendo Switch. There is also a possibility for Microsoft to increase the subscription prices if gamers are highly reliant on Xbox-exclusive games.

Cloud gaming technologies are likely to improve in the future to overcome high latency and lost frames issues faced currently. However, if Microsoft dominates the cloud gaming space, it may reduce the gaming choices for gamers.

What are the concerns over the deal?

The major concern put forth by the regulators is whether the deal could negatively impact the competitive landscape of the market. For example, Sony currently owns 21 in-house game studios, and Microsoft owns 23. If Microsoft manages to get the deal, the company will have 30 in-house game studios, making Microsoft’s Xbox a much better choice and also giving the power to decide where these games are to be played. If Microsoft makes Activision’s future games exclusive on its platforms, it will dominate the console, mobile, and cloud platforms, killing the competition. This can discourage competitors from developing high-quality games. It can also enable Microsoft to decide to reduce the quality of its games or increase the prices when it dominates the market. Even if the company makes these games available on other platforms, competitors fear that the company may offer low-quality versions or remove their marketing rights or support for other console features.

The biggest concern is over one particular game – Activision’s Call of Duty, the most-played video game in the world. Microsoft has already agreed to offer a 10-year licensing deal to console manufacturer Nintendo, however, Sony has refused to accept the offer. When Microsoft purchased Bethesda game studio in 2021, the company made its highly anticipated sci-fi game Starfield into an X-box and PC exclusive. This is one of the reasons why regulators are concerned about Microsoft’s promises to make its games available on other platforms.

The regulators also raised concerns about how the company could completely sabotage the cloud-gaming market by withholding Activision’s games from rival cloud-gaming services.

Status of the lawsuits

Microsoft is yet to receive approval from the US FTC and UK CMA. The company attempted to convince the CMA by entering into agreements with cloud gaming competitors to provide access to Xbox games. CMA remains unconvinced, which appears to be a major block for this deal. However, the company’s agreements with Nintendo and NVIDIA on providing a 10-year licensing deal for the Call of Duty game have convinced the EU regulators, and the company has won the EU antitrust approval. Regulators in Saudi Arabia, Brazil, Chile, Serbia, Japan, and South Africa have also approved the deal.

The case filed by FTC is still in the document discovery stage, and an evidentiary hearing is scheduled for August 2023. Even though the company has won FTC lawsuits before, it is to be seen if it can win the approval for this massive acquisition deal.

EOS Perspective

Considering how Nintendo managed to acquire a 30% market share in the video gaming console industry by owning just 2 studios compared to Microsoft’s 25% share with 23 owned studios, it might not be very concerning that Microsoft owning 7 more studios through the Activision deal could sabotage the competition in the market. The deal can make the rivals more competitive to develop better console generations and games.

However, it can be anticipated that Sony might lose some of its market share to Microsoft right after the deal. It can also affect Sony’s profit if the company has to take paid licenses of games owned by Microsoft. However, on the other hand, if Microsoft goes against its promises and makes the games exclusive on its platforms or does not support the other platforms’ gaming experience, it could seriously damage the competitors’ businesses. Looking at the brighter side, the marriage between two superpowers in the gaming industry could significantly transform the gaming experience for the users, open new possibilities such as Xbox mobile-game subscriptions or metaverse games, or improve cloud-gaming services.

 

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Scarcity Breeds Innovation – The Rising Adoption of Health Tech in Africa

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Africa carries the world’s highest burden of disease and experiences a severe shortage of healthcare workers. Across the continent, accessibility to primary healthcare remains to be a major challenge. During the COVID-19 pandemic, several health tech companies emerged and offered new possibilities for improving healthcare access. Among these, telemedicine and drug distribution services were able to address the shortage of health workers and healthcare facilities across many countries. New health tech solutions such as remote health monitoring, hospital automation, and virtual health assistance that are backed by AI, IoT, and predictive analytics are proving to further improve health systems in terms of costs, access, and workload on health workers. Given the diversity in per capita income, infrastructure, and policies among African countries, it remains to be seen if health tech companies can overcome these challenges and expand their reach across the continent.

Africa is the second most populated continent with a population of 1.4 billion, growing three times faster than the global average. Amid the high population growth, Africa suffers from a high prevalence of diseases. Infectious diseases such as malaria and respiratory infections contribute to 80% of the total infectious disease burden, which indicates the sum of morbidity and mortality in the world. Non-communicable diseases such as cancer and diabetes accounted for about 50% of total deaths in 2022. High rates of urbanization also pose the threat of spreading communicable diseases such as COVID-19, Ebola, and monkey fever.

A region where healthcare must be well-accessible is indeed ill-equipped due to limited healthcare infrastructure and the shortage of healthcare workers. According to WHO, the average doctor-to-population ratio in Africa is about two doctors to 10,000 people, compared with 35.5 doctors to 10,000 people in the USA.

Poor infrastructure and lack of investments worsen the health systems. Healthcare expenditure (aggregate public healthcare spending) in African countries is 20-25 times lower than the healthcare expenditure in European countries. Governments here typically spend about 5% of GDP on healthcare, compared with 10% of GDP spent by European countries. Private investment in Africa is less than 25% of the total healthcare investments.

Further, healthcare infrastructure is unevenly distributed. Professional healthcare services are concentrated in urban areas, leaving 56% of the rural population unable to access proper healthcare. There are severe gaps in the number of healthcare units, diagnostic centers, and the supply of medical devices and drugs. Countries such as Zambia, Malawi, and Angola are placed below the rank of 180 among 190 countries ranked by the WHO in terms of health systems. Low spending power and poor national health insurance schemes discourage people from using healthcare services.

Health tech solutions’ potential to fill the healthcare system gaps

As the prevailing health systems are inadequate, there is a strong need for digital solutions to address these gaps. Health tech solutions can significantly improve the access to healthcare services (consultation, diagnosis, and treatment) and supply of medical devices and drugs.

Health tech solutions can significantly improve the access to healthcare services (consultation, diagnosis, and treatment) and supply of medical devices and drugs.

For instance, Mobihealth, a UK-based digital health platform founded in 2017, is revolutionizing access to healthcare across Africa through its telemedicine app, which connects patients to over 100,000 physicians from various parts of the world for video consultations. The app has significantly (by over 60%) reduced hospital congestion.

Another example is the use of drones in Malawi to monitor mosquito breeding grounds and deliver urgent medical supplies. This project, which was introduced by UNICEF in 2017, has helped to curb the spread of malaria, which typically affects the people living in such areas at least 2-3 times a year.

MomConnect, a platform launched in 2014 by the Department of Health in South Africa, is helping millions of expectant mothers by providing essential information through a digital health desk.

While these are some of the pioneers in the health-tech industry, new companies such as Zuri Health, a telemedicine company founded in Kenya in 2020, and Ingress Healthcare, a doctor appointment booking platform launched in South Africa in 2019, are also strengthening the healthcare sector. A study published by WHO in 2020 indicated that telemedicine could reduce mortality rates by about 30% in Africa.

The rapid rise of health tech transforming the African healthcare landscape

Digital health solutions started to emerge during the late 2000’s in Africa. Wisepill, a South African smart pill box manufacturing company established in 2007, is one of the earliest African health tech success stories. The company developed smart storage containers that alert users on their mobile devices when they forget to take their medication. The product is widely used in South Africa and Uganda.

The industry gained momentum during the COVID-19 pandemic, with the emergence of several health tech companies offering remote health services. The market experienced about 300% increase in demand for remote healthcare services such as telemedicine, health monitoring, and medicine distribution.

According to WHO, the COVID pandemic resulted in the development of over 120 health tech innovations in Africa. Some of the health tech start-ups that emerged during the pandemic include Zuri Health (Kenya), Waspito (Cameroon), and Ilara Health (Kenya). Several established companies also developed specific solutions to tackle the spread of COVID-19 and increase their user base. For instance, Redbird, a Ghanaian health monitoring company founded in 2018, gained user attention by launching a COVID-19 symptom tracker during the pandemic. The company continues to provide remote health monitoring services for other ailments, such as diabetes and hypertension, which require regular health check-ups. Patients can visit the nearest pharmacy instead of a far-away hospital to conduct tests, and results will be regularly updated on their platform to track changes.

Scarcity Breeds Innovation – The Rising Adoption of Health Tech in Africa by EOS Intelligence

Start-ups offering advanced solutions based on AI and IoT have been also emerging successfully in recent years. For instance, Ilara Health, a Kenya-based company, founded during the COVID-19 pandemic, is providing affordable diagnostic services to rural population using AI-powered diagnostic devices.

With growing internet penetration (40% across Africa as of 2022) and a rise in investments, tech entrepreneurs are now able to develop solutions and expand their reach. For instance, mPharma, a Ghana-based pharmacy stock management company founded in 2013, is improving medicine supply by making prescription drugs easily accessible and affordable across nine countries in Africa. The company raised a US$35 million investment in January 2022 and is building a network of pharmacies and virtual clinics across the continent.

Currently, 42 out of 54 African countries have national eHealth strategies to support digital health initiatives. However, the maximum number of health tech companies are concentrated in countries such as South Africa, Nigeria, Egypt, and Kenya, which have the highest per capita pharma spending in the continent. Nigeria and South Africa jointly account for 46% of health tech start-ups in Africa. Telemedicine is the most offered service by start-ups founded in the past five years, especially during the COVID-19 pandemic. Some of the most popular telemedicine start-ups include Babylon Health (Rwanda), Vezeeta (Egypt), DRO Health (Nigeria), and Zuri Health (Kenya).

Other most offered services include medicine distribution, hospital/pharmacy management, and online booking and appointments. Medicine distribution start-ups have an immense impact on minimizing the prevalence of counterfeit medication by offering tech-enabled alternatives to sourcing medication from open drug markets. Many physical retail pharmacy chains, such as Goodlife Pharmacy (Kenya), HealthPlus (Nigeria), and MedPlus (Nigeria), are launching online pharmacy operations leveraging their established logistics infrastructure. Hospitals are increasingly adopting automation tools to streamline their operations. Electronic Medical Record (EMR) management tools offered by Helium Health, a provider of hospital automation tools based in Nigeria are widely adopted in six African countries.

Medicine distribution start-ups have an immense impact on minimizing the prevalence of counterfeit medication by offering tech-enabled alternatives to sourcing medication from open drug markets.

For any start-up in Africa, the key to success is to provide scalable, affordable, and accessible digital health solutions. Low-cost subscription plans offered by Mobihealth (a UK-based telehealth company founded in 2018) and Cardo Health (a Sweden-based telehealth company founded in 2021) are at least 50% more affordable than the average doctor consultation fee of US$25 in Africa. Telemedicine platforms such as Reliance HMO (Nigeria) and Rocket Health (Uganda) offer affordable health insurance that covers all medical expenses. Some governments have also taken initiatives in partnering with health tech companies to provide affordable healthcare to their people. For instance, the Rwandan government partnered with a digital health platform called Babylon Health in 2018 to deliver low-cost healthcare to the population of Rwanda. Babylon Health is able to reach the majority of the population through simple SMS codes.

Government support and Public-Private Partnerships (PPPs)

With a mission to have a digital-first universal primary care (a nationwide program that provides primary care through digital tools), the Rwandan government is setting an example by collaborating with Babylon Health, a telemedicine service that offers online consultations, appointments, and treatments.

As part of nationwide digitization efforts, the government has established broadband infrastructure that reaches 90% population of the country. Apart from this, the country has a robust health insurance named Mutuelle de Santé, which reaches more than 90% of the population. In December 2022, the government of Ghana launched a nationwide e-pharmacy platform to regulate and support digital pharmacies. Similarly, in Uganda, the government implemented a national e-health policy that recognizes the potential of technology in the healthcare sector.

MomConnect, a mobile initiative launched by the South African government with the support of Johnson and Johnson in 2014 for educating expectant and new mothers, is another example of a successful PPP. However, apart from a few countries in the region, there are not enough initiatives undertaken by the governments to improve health systems.

Private and foreign investments

In 2021, health tech start-ups in Africa raised US$392 million. The sustainability of investments became a concern when the investments dropped to US$189 million in 2022 amid the global decline in start-up funding.

However, experts predict that the investment flow will improve in 2023. Recently, in March 2023, South African e-health startup Envisionit Deep AI raised US$1.65 million from New GX Ventures SA, a South African-based venture capital company. Nigerian e-health company, Famasi, is also amongst the start-ups that raised investments during the first quarter of 2023. The company offers doorstep delivery of medicines and flexible payment plans for medicine bills.

The companies that have raised investments in recent years offer mostly telemedicine and distribution services and are based in South Africa, Nigeria, Egypt, and Kenya. That being said, start-ups in the space of wearable devices, AI, and IoT are also gaining the attention of investors. Vitls, a South African-based wearable device developer, raised US$1.3 million in funding in November 2022.

Africa-based incubators and accelerators, such as Villgro, The Baobab Network, and GrowthAfrica Accelerator, are also supporting e-health start-ups with funding and technical guidance. Villgro has launched a US$30 million fund for health tech start-ups in March 2023. Google has also committed US$4 million to fund health tech start-ups in Africa in 2023.

Digital future for healthcare in Africa

There were over 1,700 health tech start-ups in Africa as of January 2023, compared with about 1,200 start-ups in 2020. The rapid emergence of health tech companies is addressing long-running challenges of health systems and are offering tailored solutions to meet the specific needs of the African market.

Mobile penetration is higher than internet penetration, and health tech companies are encouraged to use SMS messaging to promote healthcare access. However, Africa is expected to have at least 65% internet penetration by 2025. With growing awareness of the benefits of health tech solutions, tech companies would be able to address new markets, especially in rural areas.

Companies that offer new technologies such as AI chatbots, drones, wearable devices for remote patient monitoring, hospital automation systems, e-learning platforms for health workers, the Internet of Medical Things (IoMT), and predictive analytics are expected to gain more attention in the coming years. Digitally enabled, locally-led innovations will have a huge impact on tackling the availability, affordability, and quality of health products and services.

Digitally enabled, locally-led innovations will have a huge impact on tackling the availability, affordability, and quality of health products and services.

Challenges faced by the health tech sector  

While the African health tech industry has significantly evolved over the last few years, there are still significant challenges with regard to infrastructure, computer literacy, costs, and adaptability.

For instance, in Africa, only private hospitals have switched to digital records. Many hospitals still operate without computer systems or internet connections. About 40% of the population are internet users, with countries such as Nigeria, Egypt, South Africa, Morocco, Ghana, Kenya, and Algeria being the ones with the highest number of internet users (60-80% of the population). However, 23 countries in Africa still have low internet penetration (less than 25%). This is the major reason why tech companies concentrate in the continent’s largest tech hubs.

On the other hand, the majority of the rural population prefers face-to-face contact due to the lack of digital literacy. Electricity and internet connectivity are yet to reach all parts of the region and the cost of the internet is a burden for many people. Low-spending power is a challenge, as people refuse to undergo medical treatment due to a lack of insurance schemes to cover their medical expenses. Insurance schemes provided in Africa only cover 60% of their healthcare expenses. Even though health tech solutions bring medical costs down, these services still remain unaffordable for people in low-income countries. Therefore, start-ups do not prefer to establish or expand their services in such regions.

Another hurdle tech companies face is the diversity of languages in Africa. Africa is home to one-third of the world’s languages and has over 1,000 languages. This makes it difficult for companies to customize content to reach all populations.

Amidst all these challenges, there is very little support from the governments. The companies face unfavorable policies and regulations that hinder the implementation of digital solutions. Only 8% of African countries have online pharmacy regulations. In Nigeria, regulatory guidelines for online pharmacies only came into effect in January 2022, and there are still unresolved concerns around its implementation.

Lack of public investment and comprehensive government support also discourage the local players. Public initiatives are rare in providing funding, research support, and regulatory approval for technology innovations in the health sector. Private investment flow is low for start-ups in this sector compared to other industries. Health tech start-ups raised a total investment of US$189 million in 2022, which is not even 10% of the total investments raised by start-ups in other sectors in Africa. Also, funding is favored towards the ones established in high-income countries. Founders who don’t have ties to high-income countries struggle to raise funds.

EOS Perspective

The emergence of tech health can be referred to as a necessary rise to deal with perennial gaps in the African healthcare system. Undoubtedly, many of these successful companies could transform the health sector, making quality health services available to the mass population. The pandemic has spurred the adoption of digital health, and the trend experienced during the pandemic continues to grow with the developments in the use of advanced technologies such as AI and IoT. Telemedicine and distribution have been the fastest-growing sectors driven by the demand for remote healthcare services during the pandemic. Home-based care is likely to keep gaining momentum with the development of advanced solutions for remote health monitoring and diagnostic services.

Home-based care is likely to keep gaining momentum with the development of advanced solutions for remote health monitoring and diagnostic services.

With the increasing internet penetration and acceptance of digital healthcare, health tech companies are likely to be able to expand their reach to rural areas. Right policies, PPPs, and infrastructure development are expected to catalyze the health tech adoption in Africa. Companies that offer advanced technologies such as IoT-enabled integrated medical devices, AI chatbots, drones, wearable devices for remote patient monitoring, hospital automation systems, e-learning platforms for health workers, and predictive analytics for health monitoring are expected to emerge successfully in the coming years.

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