Most importantly, we need to have regional and continental integration. Manufacturing is largely about getting economies of scale that provide competitiveness of our products both domestically and globally. It is not possible to be competitive if we depend on small volumes. We need to better apply regional and continental consolidation, whether it’s through free trade agreements or other levers at our disposal, so that the few producers we have (and hopefully new ones that come into the market) will have true market access to reach economies of scale and generate sustainable revenue streams. As an example, the Sino-Ethiopia joint venture in Addis Ababa to produce hard gelatin capsules sells their output to manufacturers across Africa and to certain Middle Eastern countries.
Additionally, regional and continental integration with regards to the standardisation of drug regulations and related intellectual property standards will also work towards creating a stronger market. and expand intra-African trade through better harmonisation and coordination of trade liberalisation and facilitation.
Well-Coordinated Policies
Furthermore, the healthcare policies that are at our disposal are not well-coordinated. We need to make full use of flexibilities within the Trade and Related Aspects of Intellectual Property Rights (TRIPS) and Doha Declaration on TRIPS and Public Health to boost the local production of generic medicines. We need to work on policies and regulations that will strengthen local manufacturing capabilities (especially for essential generic medicines, vaccines and medical commodities). Our continent is left to the devices of one- or two-year tenders, and a significant amount of donor funds. Donor funds might be well intentioned, but they’re not great for creating industries and they are largely part of the problem that perpetuates the deindustrialisation or lack of industrialisation on the continent. So we’ve got to provide local entrepreneurs the certainty and predictability that any investor in any sector would expect – such as advance purchase commitments with preference to local manufacturers. As an example, in Uganda, the government guaranteed the purchase of output for antiretrovirals manufactured by the Cipla-Quality Chemicals joint venture.
Strong Partnerships
Partnerships at the local, regional, and global levels will be crucial in the effort to advance pharmaceutical manufacturing. Governments should seek to leverage global partners to build up the capabilities of local manufacturers and engage private sector partnerships to boost technical capabilities and innovation and improve quality standards. It is imperative that governments employ investment incentives to help make the case for specific investments – including duty-free or reduced tariffs on the import of raw materials and capital goods, tax holidays and the creation of special economic or industrial zones.
