The African pharmaceutical market is projected to reach 56 to 70 billion USD by 2030. Presently, Africa’s annual demand for packaged medicines stands at 18 billion USD, with 61 % imported and 36 % produced locally. Additionally, Africa contributes 12 % of the global supply of minerals crucial for medicine production.
Africa : Future global hub of pharmaceutical production
Africa is advancing towards becoming a global pharmaceutical production hub, drawing significant international investment. Ensuring medical safety has become a priority, especially after the COVID-19 pandemic exposed the continent’s vulnerability due to its reliance on foreign aid for vaccines.
The World Economic Forum 2023 reports that Africa’s annual demand for packaged medicines is 18 billion USD. A unique advantage for Africa is that it supplies 12 % of the minerals essential to the global medical industry, bolstering its manufacturing capabilities. For instance, South Africa, the world’s leading exporter of titanium and platinum, plays a crucial role in producing essential medical devices.
Outlook for the pharmaceutical market in Africa
According to Goldstein Research’s 2023 African Pharmaceutical Market Outlook, Africa is the only continent with strong growth potential in the pharmaceutical sector. The market is projected to be worth between 56 and 70 billion USD by 2030. In 2017, the industry reached 28.56 billion USD, a significant increase from 5.5 billion USD just a decade earlier.
The study indicates that the African pharmaceutical industry presents significant growth opportunities. This trend is fuelled by:
- Population growth
- Urbanization
- Growing demand for healthcare services
The African pharmaceutical market remains relatively underdeveloped compared to other regions, presenting significant investment and growth opportunities for pharmaceutical manufacturing. With Africa’s population projected to reach 2.5 billion by 2050, and a burgeoning middle class with increased access to healthcare, the potential for growth is substantial.
Technology at the service of medical development
Africa’s pharmaceutical industry is embracing cutting-edge technologies and poised for substantial expansion. This growth aligns with the evolution of the continent’s pharmaceutical value chain. UNCTAD’s 2023 report on economic development in Africa underscores the potential of pharmaceutical and medical supply chains.
In a bid to position Africa as a premier investment destination, Pharmaconex 2023, an international pharmaceutical trade fair held in Egypt last month, brought together global pharmaceutical companies to explore business opportunities across the continent.
The African pharmaceutical market is becoming increasingly competitive, attracting more international manufacturers. Vaccine producers like Moderna and BioNTech are building factories in Africa, signaling further growth and development for the African pharmaceutical industry in the coming years.
Pharmaceutical startups in Africa
Salient Advisory’s July 2023 report highlights that around 350 startups face challenges in effectively distributing quality healthcare products in Africa. The Investing in Innovation Africa (i3) initiative supports healthcare startups in 21 African countries, providing digital-based solutions. Each selected startup will receive a 50,000 USD grant and connections with potential customers, donor organizations, and governments.
Funded by the Bill & Melinda Gates Foundation and sponsored by Cencora, Merck Sharpe & Dohme, Microsoft, and Chemonics, the program aims to revolutionize healthcare supply chains across the continent.
Vaccine manufacturing in Africa
The COVID-19 pandemic underscored the critical need for robust national pharmaceutical industries in Africa. It spurred African countries to enhance their vaccine manufacturing capacities, as they were the last to access vaccines globally. Establishing a production center in Africa could significantly boost economic growth and improve health security.
Pharmaceutical production aligns with the goals of the African Union and the African Centre for Disease Control and Prevention (CDC) to produce 60 % of Africa’s vaccine doses by 2040. The African Vaccine Manufacturing Partnership (AVMP), established in 2021, aims to consolidate efforts to build a strong healthcare manufacturing industry across the continent. This initiative seeks to achieve sustainable development and ensure sufficient production and supply for Africa’s growing population.
Achieving health security objectives
Africa’s health security is a top priority in the AU’s Agenda 2063. As part of this initiative, a new roadmap has been adopted to launch the Global Health Security Agenda, which includes promoting local manufacturing of healthcare products in Africa.
Three months ago, Kenya, the DRC, and Cape Verde ratified the African Medicines Agency Treaty. Initially adopted by the AU Assembly in 2019, this plan has received formal support from 37 countries. These measures are crucial for establishing the AU’s specialized agency, which aims to improve access to high-quality, safe, and effective medical products in Africa while enhancing pharmaceutical markets.
