Africa’s Pharmaceutical Sector: Scaling Local Production with Global Alliances

Africa’s pharmaceutical market, valued at approximately $28.56 billion in 2020, is projected to reach $70 billion by 2030. This growth is driven by population expansion, urbanisation, and an increasing prevalence of non-communicable diseases (NCDs) such as diabetes and cardiovascular conditions, as well as the persistent challenges of infectious diseases like malaria and HIV/AIDS.

Despite this growth potential, Africa’s pharmaceutical manufacturing capacity remains limited. Only 375 drug manufacturers operate across the continent, with the majority concentrated in just a few countries, including South Africa, Egypt, and Nigeria. According to the African Union Development Agency (AUDA-NEPAD), these manufacturers primarily produce generic drugs, leaving the continent vulnerable to global supply chain disruptions for essential medicines.

Challenges Facing Local Production

Several barriers hinder the expansion of local pharmaceutical production in Africa:

1. Regulatory Fragmentation: Africa’s regulatory landscape is characterised by fragmentation, with over 50 regulatory authorities operating independently. This lack of harmonisation complicates drug registration, increases the cost of compliance, and discourages investment in local manufacturing.
2. Inadequate Infrastructure: Reliable energy, water, and transportation are critical for pharmaceutical manufacturing. However, many African countries face significant infrastructural deficits, making it challenging to establish and sustain high-quality production facilities.
3. Human Capital and R&D Deficiencies: The industry suffers from a shortage of skilled professionals in pharmaceutical research, manufacturing, and quality control. Investment in Research and Development (R&D) is also limited, with Africa accounting for less than 1% of global pharmaceutical R&D expenditure.
4. Limited Access to Finance: The capital-intensive nature of pharmaceutical manufacturing, coupled with perceived risks, makes it difficult for local manufacturers to secure financing. Even when funding is available, it often comes at a high cost, further inhibiting growth.

Initiatives Supporting Local Production

Recognising these challenges, several initiatives have been launched to bolster local pharmaceutical production across Africa:

• The African Medicines Agency (AMA): Established in 2019 under the African Union (AU), the AMA aims to harmonise regulations across the continent, streamline drug approval processes, and improve access to safe, effective, and quality-assured medicines.
• The African Continental Free Trade Area (AfCFTA): Operational since 2021, AfCFTA presents an opportunity to create a single market for pharmaceuticals, reduce tariffs, and facilitate intra-African trade in medicines. By addressing regulatory and logistical barriers, AfCFTA could accelerate the development of a robust pharmaceutical manufacturing base across the continent.
• The Partnerships for African Vaccine Manufacturing (PAVM): Launched in 2021, this AU-led initiative aims to enable African nations to produce 60% of their vaccine needs by 2040. Partnerships between African governments, international organisations, and private sector stakeholders are critical to achieving this goal.

Global Partnerships and Investment

Global partnerships are essential for overcoming the challenges facing Africa’s pharmaceutical sector. Several multinational companies and international organisations have already established collaborations with African governments and local manufacturers:

• BioNTech and Rwanda/Senegal: In a landmark deal, BioNTech announced plans in 2022 to establish mRNA vaccine production facilities in Rwanda and Senegal. This partnership aims to increase Africa’s capacity to produce vaccines locally, reducing reliance on imported vaccines in the long term.
• Johnson & Johnson and Aspen Pharmacare: Johnson & Johnson has partnered with South Africa’s Aspen Pharmacare to produce COVID-19 vaccines for the African market. Aspen’s role in manufacturing these vaccines underscores the potential of African pharmaceutical companies to contribute to global health security.
• The World Bank’s Financing Initiatives: The World Bank has committed significant financial resources to support local pharmaceutical production in Africa. For example, in 2021, the Bank announced a $12 billion investment to accelerate vaccine production and distribution across the continent.

These partnerships highlight the importance of international collaboration in scaling up Africa’s pharmaceutical capabilities. They also demonstrate the growing recognition of Africa’s potential as a key player in the global pharmaceutical supply chain.

The Road Ahead

1. Strengthening Regulatory Harmonisation: Accelerating the implementation of the African Medicines Agency and further harmonising regulatory frameworks across African countries will be vital to reducing the complexity and cost of drug production.
2. Investing in Infrastructure and Human Capital: Governments, in collaboration with international partners, must prioritise investments in infrastructure and the training of skilled professionals. Developing centres of excellence in pharmaceutical research and manufacturing can also catalyse innovation and improve production standards.
3. Enhancing Access to Finance: Financial institutions and development partners need to create tailored financial products that reduce the perceived risks associated with pharmaceutical investments in Africa. Blended finance models, combining public and private capital, can help unlock funding for local manufacturers.
4. Promoting Intra-African Trade: The African Continental Free Trade Area offers a historic opportunity to build a strong pharmaceutical manufacturing sector. African governments must ensure that their pharmaceutical policies align with AfCFTA’s objectives to create a seamless and competitive market for medicines.

The pharmaceutical sector in Africa presents a significant opportunity for economic growth, public health advancement, and global partnerships. Despite the continent’s vast potential, Africa’s pharmaceutical industry has historically been dependent on imports, with 70-90% of pharmaceuticals coming from abroad. However, there is a growing momentum for local production, supported by various initiatives aimed at reducing dependency on imports, fostering self-reliance, and enhancing health security.