Overview

Unit:  US$ millions

Source: BMI, National Statistics, Fitch Solutions, Other
South Africa is one of the largest medical devices’ markets in the MEA region. Spending on medical devices as a proportion of wealth is lower than average for this region, at around 0.3% of GDP and 4.0% of health expenditure (2015).

Projections for 2019 show that that the market will grow at around 6.7% in US dollar terms, amounting to USD1.8 billion by 2023. But challenges remain due to high unemployment, sluggish economic growth and currency fluctuations. Most of the major product categories will be affected, which include consumables, diagnostics, dental, and orthopedics. Medical device imports will grow modestly, and South African exports will remain muted.

The medical device market in South Africa continues to be dominated by the United States in all categories, but particularly in orthopedics, prosthetics, patient aids, other devices and consumables. However, buyers are increasingly looking towards sourcing from Asian markets to save on costs. Germany is second to the United States, followed by China, Switzerland, the United Kingdom, and Japan. China is making significant inroads, increasing by around 10% in terms of market share.

Market growth will likely be influenced by national legislation related to the government’s NHI program, increased government spending on healthcare and priority programs, as well as the Competition Commission’s investigation into private healthcare costs.

Competition from local production is estimated at around 9% and mostly limited to consumables (bandages, dressings, etc.) and furniture.  The development of Lodox Systems, a full-body X-ray machine, as well as the Aceso system by CapeRay, a screening device integrating two modalities -– full field mammography and automated breast ultrasound, indicates that local producers can successfully compete with international suppliers of sophisticated equipment if they have access to the appropriate funding channels.

Medical devices and in vitro diagnostic (IVD) devices are regulated by the South African Health Products Regulatory Authority (SAHPRA), a semi-autonomous body established by the National Department of Health in 2016. In addition to devices, the Authority also regulates medicines (pharmaceutical and supplements), and cosmetics. South African healthcare exporters, importers, distributors and manufacturers are required to register with SAHPRA, and only legally authorized local entity may approach SAHPRA for device registration. SAHPRA can impose requirements at its discretion for devices not participating in public tenders in order to ensure that the medical device or IVD meets the essential principles of safety and performance, as determined by the Council.

Sub-Sector Best Prospects                                                                                              

According to analysis by BMI, diagnostic imaging facilities are underdeveloped with a low provision of advanced equipment. According to the WHO, in the electrodiagnostic sector, South Africa has 10 MRI scanners and three PET scanners in public facilities, equal to 0.2 and less than 0.1 per thousand population. In the radiology sector, there are 51 CT scanners and 32 mammography units, equal to 1.0 and 0.6 per thousand population. Radiotherapy equipment includes 21 linear accelerators and nine telecobalt units. The overall provision of equipment would be significantly higher if units in the private sector were included. There is a clear need for improved cancer treatment based on a cancer incidence of 255 new cases per 100,000 people annually, with 60% requiring radiotherapy.
Diagnostic Imaging Equipment:
Consistent with healthcare infrastructure upgrades, demand for diagnostic imaging equipment is forecast to grow approximately 12% between 2016 and 2021. The United States and Germany are leading suppliers in this sector, followed by China, the Netherlands, Japan and UK.

Radiation Equipment
This market is estimated to grow around 6%, led by CT scanners. Germany dominates this sector, followed by the UK and China.

Dental Equipment:
Access to good dental health remains a problem for most of the population. Imports supply over 90% of this market, mainly sourced from Germany and the United States (23%). Capital equipment is the smallest segment, with dental drills recording the biggest growth potential.

Consumables:
The estimated size of this market is around $240 million, with over 90% imported. The United States leads with 20% market share but supplies more advanced products in this category. Basic bandages and dressings come from China, and to some extent, local production. The United States dominates the segment for suturing materials, while the EU is the primary source for syringes, needles and catheters.

Opportunities     

The underdeveloped medical devices market offers potential for growth, but faces considerable restraints including funding issues, poor infrastructure, and staff shortages (particularly in the public sector). Opportunities will exist for exporters of medical equipment (particularly new and innovative equipment), as the government considers extensive upgrades and development of hospital infrastructure.  The private healthcare sector is very sophisticated and boasts world class facilities with several centers of excellence.  Approximately 91% of medical equipment is imported. The medical community, particularly in the private sector, does not favor refurbished medical equipment and market opportunities are limited.

Web Resources                                                                                                  

National Department of Health (DOH)
http://www.health.gov.za/

South Africa Health Products Regulatory Authority (SAPHRA)
http://www.sahpra.org.za/

South African Medical Devices Industry Association (SAMED)
http://www.samed.org.za

Radiological Society of South Africa
http://www.rssa.co.za

South African Orthopedic Association
http://www.saoa.org.za

South African Spine Society
http://www.saspine.org

Major Shows
Africa Health 2019
May 28 – 30, 2019
Gallagher Convention Center, Johannesburg
www.africahealthexhibition.com

For more information, the U.S. Commercial Service in Johannesburg, South Africa, can be contacted via e-mail at:
Felicity.Nagel@trade.gov
Phone: +27 11 290 3332; Fax: +27 11 884 0253, or visit our Website:
http://export.gov/southafrica/index.asp.