Presentation by Dr. Feng Zhao, African Development Bank at the Euro-Africa Health Investment Conference, March 26 - 27, 2013, London, United Kingdom.

1. AFRICAN PHARMACEUTICAL SECTOR:
A GLOBAL OPPORTUNITY
Euro-Africa Health Investment Conference
London, 27 March 2013
Dr. Feng Zhao, Manager, Health Division,
African Development Bank

2. 2
Africa Rising: Rapid Economic Growth
• Africa is growing rapidly at 5-8% per annum
• Six out of 10 world’s fastest-growing economies are in Africa
Annual Average GDP Growth: 2001-2011
8.9
8.4
8.2
7.9
7.9
7.7
7.6
Rwanda
10
Cambodia
10.3
Mozambiq
ue
10.5
Chad
11.1
Kazakhsta
n
12
6
4
2
Ethiopia
Nigeria
Myanmar
Source: Economist & IMF
China
0
Angola
Percent
8

3. But Growth is not always Inclusive
• Six out of 10 most unequal countries are in Sub-Saharan Africa
• Inequitable growth negatively impacts human development prospects
• Poor people in Africa have much less access to health care and essential
medicines
Contraceptive Prevalence Rate by Income Quintile
35
29.2
Percentage of women 15-49 years
30
25
20
20
15.3
15
12.7
10.1
10
5
0
Poorest
Poor
Middle
Rich
Richest

4. Pharmaceutical expenditure absorbs a large
share of health expenditure in Africa
• On average 25% of total health expenditure is spent on
medicines in Sub-Saharan Africa
• Represents more than 50% of THE in Ethiopia & Uganda
• Despite country variation, pharmaceutical public
spending can reach up to 45% of government health
budget in some African countries

5. Still, pharmaceutical products are not available
for African populations
• High level of dependency on externally developed and
procured drugs, vaccines, medical devices and
diagnostics
• Tanzania imports about 70% of its national drug
requirements.
• HIV/AIDS: 80 % of ARV finished formulations in Africa
are imported
• Poor access to essential medicines
• In SSA only 38% of essential drugs are available in
public facilities

6. A small but growing industry…
• Global market: US$955bn in
2011
Pharmaceutical sales in selected African
countries, 2011
4
North America: US$347.1bn
Europe: US$265.4bn
3.5
Japan: US$111.2bn
Asia/Africa/Australia: US$165.2bn 3
2.5
Latin America: US66.7bn
o
o
o
o
o
2
• African market: US$23bn
o
o
o
o
o
o
South Africa: > US$3.8bn
Egypt: US$3bn
Algeria: US$2.8bn
Nigeria: US$1.8bn
Morocco: US$1.2bn
Kenya: US$0.66mn
• Pharmaceuticals sales growth
1.5
1
0.5
0
Pharmaceutical sales US$bn
rates are expected to be over
Source: IMS Health 2012
10% in 2012-16 in
care reports 2012.
Egypt, Mozambique, Angola, Ug
anda, Nigeria, Tanzania and
Botswana
and BMI, pharmaceutical and health

7. Factors Contributing to Pharmaceutical Industry Growth
Growing 'Consumerism'
African Demographic trends
& Rising Medical Needs
Stable
Macroeconomic
Growth
Maturing
Regulatory
Environment
Pharmaceutical
Industry Growth

8. Pharmaceutical Manufacturing Plan for
Africa
• PMPA: Borne out of the recognition by African Heads of state of the
tremendous challenges facing African healthcare systems
• Objective: strengthen Africa’s ability to produce high quality, affordable
pharmaceuticals across all essential medicines to contribute to
improved health outcomes and the realization of direct and indirect
economic benefits.
• Clear Political Commitment: Initial Plan endorsed by Heads of State
– Accra 2007
• Development and adoption of Business plan – 2012

9. 9
The AfDB at a glance
• Africa’s premier development institution owned and
trusted by member states
• Clean records and good reputation (AAA rating)
• Investment portfolio-$3 billion annually (6% of
development aid)
• Invested in health since the 1970s a total of UA
1.89 billion (about US$ 2.8 billion).
• Instruments
o Lending: Loans/grants
o Non-lending: Analytical work; TA

10. The Duality of the Health Sector
Public Health
Health Industry
• Health as fundamental
• Contributes to Economic
human right
• Fundamental to peace
and security
• Governments responsible
for the health of their
people
Growth
• Source of employment

11. The AfDB: Supporting Africa’s pharmaceutical sector
• Dialogue with Ministry of Finance
• Harvard Leadership program for Ministers of Finance
• Dialogue with Private sector
• Business to Business platform
• Access to finance
• Partnerships with key stakeholders in Africa
• African Regulators, manufacturers, African Network for Drugs and
Diagnostics Innovation, Development partners
• Development of knowledge sharing events and products
• South-South learning event (Visit to India)
• Economic and Sector Work
• Support to regional member countries

12. Regional operation to vitalize the pharmaceutical sector in
Africa
• Objectives of the regional operation
• Meet basic demand for essential health products to improve health status
• Increase opportunities to invest in the sector in Africa, develop the private
sector to create jobs and contribute to economic growth.
• Multi-stakeholders involvement
• Support Governments for public sector reform and incentives to
create a supportive system in member countries
• Create a conducive environment for industry development;
• Reform regulatory frameworks and strengthening capacities;
• Incentives to strengthen and/or develop SMEs, private sector, public-private
partnerships, new incubators and innovation hubs;
• Upgrading of facilities for GMP and quality assurance;
• Business to business platform to facilitate technology transfer.

13. THANK YOU