Business News of Friday, 10 February 2017
The pharmaceutical manufacturing sector (PMS) is recognised for its potential for job creation, improvement in household incomes, investment opportunities, industrial growth and advanced skills set development to mention just but a few. However, despite the relatively long tenure of the industry in the country, the sector has always been punching below its weight in most areas.
Even those investors already in the sector are trying to disinvest, either looking for new buyers or looking to other markets to make up. The sector is situate in a fundamentally imperfect market, cetera paribus so predictability is a strong challenge; businesses abhor uncertainties.
This is compounded by unavailability of data for the sector. Attempts to gather data is always a big problem just like any other sector of the economy. Since investors will not invest in the dark, the sector is not able to attract the needed support and investments required.
Indeed, this is also a sector which has high capital requirements and the investments should be long term in nature to be meaningful; 10 years in my estimation to expect meaningful returns.
The FDA is required to receive data on production and sales from the sector players at the end of each year but this is never provided. If it is provided, it is not complete, scanty or inadequate and not from all the sector players. So it becomes impossible to get an aggregate for the sector for policy and investment decisions.
There have been attempts by UNIDO (non-commercial) and IMS (commercial) to address this challenge with the sector data to improve visibility in the sector for the manufacturers, investors, decision makers, industrialists as well as public health officials but progress is very slow indeed.
No wonder, Vice-President Mahamudu Bawumia lamented bitterly about lack of data in the economy recently at a lecture at the Kempeski Hotel. As an economist and Chairman of the Economic Management team, I would expect him to prioritise the data collection business in all sectors of the economy during his tenure in office to facilitate transformation of the economy.
The availability of development finance is a big challenge in the economy. EDIF to EDAIF and now to Exim Bank, as well as EBID (ECOWAS) are public development finance institutions (DFI) in the country.
The development partners also have some DFIs in their domain to assist with investments but the volatile exchange rate does not make any foreign denominated investment attractive. There is a need for more cedi denominated DFIs to facilitate the deployment long-term financial instruments in the sector and the economy.
Apart from Ghana and Nigeria, there is no meaningful pharmaceutical manufacturing in ECOWAS. However, pharmaceutical products from Ghana are held in high esteem in ECOWAS to be of good quality due to the good reputation of the regulator, FDA in the ECOWAS.
The ECOWAS markets ,therefore, are there for taking if the bottlenecks of product registration and fees and distribution (harassment by security personnel through land areas and at the borders) and addressed.
The introduction of health insurance schemes across the ECOWAS is increasing access to healthcare and broadening the healthcare market to support pharmaceutical manufacturing.
If the ECOWAS countries will abide by the Abuja Declaration which mandates the ECOWAS countries to use 15 per cent of their Gross Domestic Product (GDP) for total health expenditure annually is adhered to that could also be shot in the arm for the transformation.
The sector needs specialised skills set not easily available because our pharmacy tertiary training institutions do not train the technologists in adequate numbers. The technologists are usually obtained from India or the local ones are given on the job training.
The product range of the local manufacturers are not wide enough so an on the job training will not provide much in terms of scope. Nevertheless, the pharmacy training institutions can be assisted to fill this gap by offering the trainings required for accelerated products development for transformation.
The PMS has always been touted as a priority sector in the economy but one is at a loss as to what is there to make it a priority.