The fortunes of Ghana’s pharmaceutical industry is turning around rather swiftly, following recent priority actions undertaken by the government, Fitch Solutions asserts.
With the aim of establishing itself as the pharmaceutical hub for sub-Saharan Africa (SSA), the Ghana National Chamber of Pharmacy (GNCP) signed a Memorandum of Understanding with a construction firm in September 2020. The agreement was to give the green light for the creation of a pharmaceutical industrial park for pharmaceutical companies. The aim was to enable these companies establish large scale operations.
Furthermore, in November 2020, the President of the Republic impressed upon the Pharmaceutical Society of Ghana (PSGH) to position the country to become the centre of generic drugs production across SSA. Moreover, Ghana is one of two countries in SSA producing active pharmaceutical ingredients (API).
Fitch Solutions expect that these developments will help accelerate gains including growth of Ghana’s pharmaceutical industry.
While this positive outlook is nascent, it is likely to materialize fully in the long term. Meanwhile, the COVID-19 pandemic seems to have caused this much attention on the industry by the government.
Specifically, the supply shortages of vaccines, especially the COVAX vaccine amid the growing global demand has sparked an appeal by the Pharmaceutical Association of Ghana (PMAG) to the government to strengthen local vaccine production.
Fitch Solutions asserts that this move would help guarantee a reliable source of vaccines for the country. Also, the government has begun feasibility studies to manufacture its own COVID-19 vaccine. This would therefore limit Ghana and Africa’s reliance on foreign vaccines in the long term.
Pharmaceutical trade deficit to reduce in the long term
To this end, the Ghana National Chamber of Pharmacy (GNCoP), with funding from foreign development organizations, has created a support package of USD626, 000. The fund will provide grants to pharmaceutical manufacturers and for distributors and consulting firms within the pharmaceutical industry.
Continuing this trend of boosting local production will reduce pharmaceutical trade deficit in the long term, Fitch Solutions forecasts. Current data shows that imports of pharmaceutical products outweigh exports, and this trend will continue over the next 5 years. A profile of countries from which Ghana imports include India, Netherlands and Belgium. However, this may change in the long term considering the increased attention on local production.
“With increasing local drug production, paired with the commencement of the African Free Trade Continental Area we expect exports to grow rapidly, especially to neighbouring countries such as Cote d’Ivoire, Liberia, Burkina Faso.”
Over the next five years, the research firm reveals that drug exports will reach 14.6% in terms of compound annual growth rate (CAGR), thus, reaching GHS103.8 million. In 2020 alone, pharmaceutical imports reached GHS 1.3 billion. However, this value will increase in local currency terms to GHS2.3 billion in 2025, reflecting a CAGR of 12.0%.
Moreover, Fitch Solutions expects increased local production to improve Ghana’s domestic pharmaceutical market. This growth is influenced mainly by local generics production. Along these lines, pharmaceutical sales in Ghana will increase from GHS2.69 billion in 2020 to GHS2.86 billion in 2021.
According to the research firm, this value will rise to GHS3.96 billion in 2025. On a 10-year basis, Fitch Solutions forecasts sales to reach GHS6.55 billion in 2030.
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