- Estimates show that Africa’s pharmaceutical market will grow to between $56 billion and $70 billion by 2030.
- Currently, the total demand for packaged medicines in Africa is $18 billion per year, of which 61 per cent is imported and 36 per cent is made locally.
- Interestingly, Africa provides 12 per cent of global exports of vital minerals to make medicines.
Africa has taken giant strides to become a global pharmaceutical manufacturing hub, with the sector catching the eye of international investors. For Africa, achieving medical security has become a priority. This is especially so following the painful lessons the continent picked when tackling the COVID-19 pandemic. As other continents got vaccines on preference, Africa was vulnerable due to her overreliance on foreign support.
According to the 2023 World Economic Forum, Africa’s annual demand for packaged medicines is $18 billion. Of this amount, 61 per cent is imported, and 36 per cent is locally produced but not traded. Africa’s unique advantage lies in providing 12 per cent of the world’s vital minerals used in the medical industry, giving the continent a strong position for manufacturing. For example, South Africa, as the world’s top exporter of titanium and platinum, plays a crucial role in producing essential medical devices.
Africa’s Pharmaceutical Market Outlook
According to the 2023 African Pharmaceutical Market Outlook by Goldstein Research, Africa is the only place with the potential for high growth in the pharmaceutical market. Estimates show that the sector will be worth between $56 billion and $70 billion by 2030. Additionally, data shows the industry hit $28.56 billion in 2017 from just $5.5 billion a decade earlier.
The research indicates that the African pharmaceutical industry presents significant growth opportunities. This trend is driven by population growth, urbanisation, and increasing demand for healthcare services.
The African pharmaceutical market is also relatively underdeveloped compared to other regions. This presents significant opportunities for investment and growth of a pharmaceutical manufacturing hub. Africa’s population is set to hit 2.5 billion by 2050, with a growing middle class that has increased access to healthcare.
Additionally, Africa’s pharmaceutical industry is embracing the latest technology and has the potential to register massive expansion in the years ahead. This growth will be in tandem with the evolution of the continent’s pharma value chain. The 2023 UNCTAD’s Economic Development in Africa report also highlights the potential of pharmaceutical and medical product supply chains.
As part of positioning Africa as a top investment destination, the 2023 Pharmaconex, an international pharma exhibition held in Egypt last month, brought together pharmaceutical companies from across the globe to explore business opportunities in Egypt and the rest of Africa.
Africa’s pharmaceutical market is also becoming increasingly competitive as global pharmaceutical manufacturing companies set shop. For instance, vaccine makers Moderna and BioNTech are building their plants in Africa. The African pharmaceutical industry looks set for further growth and development in the coming years.
[Photo-Xinhua]
Vaccine manufacturing in Africa
The COVID-19 pandemic brought to the fore the significance of having functional and productive domestic pharmaceutical industries in the continent. Indeed, once bitten twice shy, the pandemic prompted African countries to build internal vaccine manufacturing capacities. This was instigated by the difficulties encountered during the pandemic. Countries across Africa were the last globally to get access to vaccines.
A manufacturing hub in Africa can significantly bolster economic growth and boost health security. The production of pharmaceutical goods within Africa aligns with the African Union and African Centre for Disease and Control and Prevention’s goal of producing 60 per cent of the total vaccine doses required in Africa by 2040.
The Partnerships for African Vaccine Manufacturing (PAVM) was established in 2021 to realise this agenda. It seeks to consolidate efforts towards realising a robust health manufacturing industry across the continent. The plan envisions achieving sustainable development, production and sufficient supply for Africa’s growing populace.
Africa’s health security is a top priority in Agenda 2063 by the AU. Under the deal, a new roadmap was adopted, promoting a ‘New Public Health Order for Africa’ to kickstart the Global Health Security Agenda. Among its goals is advocating for local health product manufacturing in Africa.
Kenya, DRC, and Cape Verde ratified the Africa Medicines Agency Treaty three months ago. Initially adopted by the AU assembly in 2019, this plan has received formal support from 37 countries. Such steps are crucial in establishing the AU’s specialised agency, which aims to improve access to high-quality, safe, and efficient medical products in Africa while enhancing pharmaceutical markets.
[Photo-Health Policy Watch]
Pharmaceutical manufacturing in Africa
At the Africa Health ExCon in Cairo, Egypt, held in June 2023, Dr. Jean Kaseya, the Director General of Africa CDC, urged collective efforts to safeguard African populations and ensure access to high-quality health products. This will involve strengthening local manufacturing. The Africa Health ExCon is a vital platform promoting health technology, innovation, and pharmaceutical capabilities. It also helps to foster collaboration and trade within Africa’s healthcare sector.
Unfortunately, Africa faces pressing issues related to unequal access to health products and supply chain challenges. In response, Nigerian health tech startup Remedial Health recently secured $12 million in equity and debt funding. The firm develops innovative tech solutions that improve the efficiency of Africa’s pharmaceutical value chain.
Overall, it simplifies healthcare providers’ access to affordable and genuine retail medicines, consumables, and medical devices from manufacturers and distributors. Remedial Health operates at the intersection of healthcare, technology, supply chain management, and financial services. This is by offering digital procurement infrastructure to streamline healthcare distribution for Africa’s 1.2 million pharmacies.
Furthermore, Sothema, Morocco’s largest pharmaceutical company, intends to expand into East Africa. This will mark its third destination on the continent after Senegal and its home country. The new plant will specialise in high-value products, including those related to oncology and diabetes.
Also read : AgriTech: Africa’s pathway to end food insecurity
The trend in the pharma industry in Africa
Africa has been making remarkable progress towards becoming a pharmaceutical manufacturing hub. A good example is the mRNA technology transfer program based in South Africa and backed by the World Health Organization. The mRNA technology is shared with partners in Kenya, Senegal, Nigeria, Tunisia, and Egypt, as well as in nine other low and middle-income countries. For instance, Afrigen in South Africa has already developed an mRNA COVID-19 vaccine prototype and is researching beyond COVID-19 on TB and HIV.
As part of its Vision 2030 for Africa’s Pharmaceutical Industry and the 2040 AU/ACDC plan for local vaccine manufacturing, the AfDB launched a program to support local vaccine production. It focuses on four key enablers: regional logistics integration, industry standards, Research and development capacity, and increasing vaccine production.
Egypt’s medicine city, Gyptopharma in Cairo, is a leader in Africa’s pharmaceutical sector. It prioritises medical security, localising industry, and ensuring high-quality products for local and regional markets. Equipped with advanced technology, the city’s factories produce biosimilars, oncology meds, vaccines, hormone drugs, and Beta-Lactam antibiotics. It also houses facilities for traditional medicine, industrial services, and administration.
[Photo/Presidency]
Boosting Africa’s Pharma Value Chain
As the sector has been growing, so has the supply chain fueled by technology. For instance, personalised medicine cell and gene therapies have been gaining momentum. This has led to advancements in precision therapies in the pharmaceutical sector. Bio-specific treatments tailored to a particular individual’s needs, based on their genome, have increased.
The biopharma market, which calls for temperature-controlled transport, has been burgeoning. Gradually, this is increasing demand for efficient and sustainable cold chain transport, such as thermally-controlled containers. For instance, the Dewars are vacuum flasks that keep a constant temperature as low as -70° for up to three weeks. Such initiatives are viable for vaccines, clinical trials, and diagnostics biospecimens. Therefore, it has become imperative to tap the potential of technology to bolster the entire pharma value chain.
African Export–Import Bank (Afreximbank) is the vaccine manufacturing value chain. The lender has various products, including project finance, early-stage project preparatory support, financial advisory services, and risk-bearing instruments.
Vaccine manufacturing in the continent
In the first quarter of this year, Africa CDC held a meeting during the 2023 Africa Health Agenda International Conference in Kigali, Rwanda. The focus was setting annual objectives for the Partnership for African Vaccine Manufacturing (PAVM) in 2023.
Participants reviewed the eight programs outlined in the PAVM Framework for Action and incorporated practical steps.
PAVM, initiated in 2021 by the AU under Africa CDC, aims to boost Africa’s vaccine manufacturing industry to produce over 60 per cent of the continent’s vaccine doses by 2040, up from less than 1 per cent. The vision is to achieve a manufacturing capacity of at least 1.5 billion vaccine doses annually by 2040.
Also read: Decarbonising transport: Exploring e-mobility in Africa
Pharmaceutical startups in Africa
In a July 2023 report from Salient Advisory, a pan-African healthcare research advisory, it’s noted that approximately 350 startups are addressing challenges in distributing quality health products efficiently in Africa. Many of these startups saw increased demand during the COVID-19 pandemic when public systems faced disruptions.
The Investing in Innovation Africa (i3) initiative supports startups and has just announced its second cohort of 29 healthcare supply chain companies across 21 African countries. These startups offer digitally enabled solutions. Each chosen startup will receive a $50,000 grant and connections to potential customers in the industry, donor agencies, and governments.
The first cohort of i3-supported 31 startups will reach 24,000 healthcare facilities in 26 African countries. They’re involved in creating online pharmacies, telemedicine services, and inventory management for healthcare facilities. The initiative is funded by the Bill & Melinda Gates Foundation and sponsored by Cencora, Merck Sharpe & Dohme, Microsoft, and Chemonics, focusing on revolutionising healthcare supply chains.
Also Read: African Startups’ Resilience Tested Amid a Financing Dip
The way forward on Africa’s pharma manufacturing hub
Safeguarding Africa’s health can only be achieved through manufacturing the health products needed on the continent. Achieving the 2040 vision is possible when access to the necessary finance is well coordinated and facilitated.
The 2023 UNCTAD’s Economic Development in Africa Report singles out the Africa Medical Supplies Platform, which enables the delivery of medical supplies to African governments by promoting pooled procurement and financing.
Another prime example is the AfCFTA-based Pharmaceutical Initiative, which contains a centralised pooled procurement mechanism. It was launched by the Economic Commission for Africa.
Adequate research and development is also needed, coupled with national and regional investments by action-oriented partners. In addition, building local skills and knowledge is critical in achieving this. The AU and the African governments must also prioritise initiatives that bolster technology and knowledge transfer.
