Enthusiasm is Not Industrial Policy

In 2024, I wrote that Africa had yet to scratch the surface of its pharmaceutical potential in response to a crisis that is both a health issue and a structural economic failure. The continent carries nearly 25% of the global disease burden and produces less that 6% of essential medicines domestically beholden to external supply chains, donor conditionalities, and the dominance of the big pharma. The Covid-19 pandemic highlighted how the continent not only imports its pills but also its resilience, industrial capacity, scientific ambition, and effectively a critical part of its sovereignty.

This week, the launch of the Africa Initiative for Medical Access and Manufacturing (AIM2030) at the Africa Forward Summit in Nairobi reopened the discussion which could make the industry a core economic and geopolitical agenda. If politicians and policy makers are to be taken seriously, it renewed commitments around the African Continental Free Trade Area (AfCFTA), the African Medicines Agency (AMA), and regional industrialization strategies towards awakening the industry. However, enthusiasm alone cannot be considered an industrial policy for the industry that was valued at $36 billion in 2023 and is expected t exceed $122 billion by 2032.

Arguably, with the continent manufacturing half of the current imports, it could save between $30 and $50 billion annually, resources that can be used on infrastructure, homegrown innovation, and social protection. However, in a continent that has historically done well at declarations and underperformed at execution, the real question now is whether governments are willing to undertake the difficult policy reforms to make pharmaceutical manufacturing commercially viable, globally competitive, and institutionally sustainable.

The Cost of Dependency

AfCFTA Secretary-General H.E Wamkele Mene pointed that while in 2019 Africa imported $21 billion worth of pharmaceuticals, in 2025, the figure had climbed with no significant movement in home manufacturing and distribution capacities. Moreover, raised were the not-so-new grievances on demand risks, regulatory risks, and high production costs. This is certainly how Africa found herself at the back of the global supply chains, unable to access vaccines, active pharmaceutical ingredients (APIs), diagnostics, and basic protective equipment. The question now is whether the political movement is finally aligning with the policy architecture that is needed to dismantle them. This has to be looked at from a perspective of continental strategic priority involving trade, industrialization, finance, diplomacy, security, and infrastructure.

President Ruto on the AIM2030 launch dialogue On the margins of the Africa Forward Summit. Photo| @AfCFTA/X

Notably however, Africa’s pharmaceutical industry problem is a market problem as opposed to a mere lack of factories. While diplomatic and political rhetoric has continuously encouraged local manufacturing, it has simultaneously undermined it through fragmented procurement systems, inconsistent regulations, unpredictable tariffs, delayed payments, and preference for cheaper imports. Without serious, consistent, and predictable demand hardly will any serious investor consider investing in the capital-intensive sector.

The “demand risk” and “regulatory risk” talk at the summit was therefore significant aimed at fixing structural issues in the market around trade frameworks, rules of origin, and market integration. Moreover, many African markets are too small to sustain large-scale manufacturing competitive. However, collectively, Africa has one of the world’s largest growing pharmaceutical markets.

The AfCFTA Lever

AfCFTA plays an indispensable and an underutilized role in fixing the industry. The agreement is a crucial backbone to the industry in enhancing the harmonization of standards, unified rules of origin, reduced tariff barriers, and coordinated procurement systems that would allow the emergence of economies of scale for effectiveness in manufacturing.

Harmonized rules of origin would determine what qualifies as “African-made” for the purposes of intra-continental trade preferences. APIs are often sourced from China and India and merely processed on the continent with how the rules are applied either incentivizing genuine value addition or inadvertently reward repackaging. Calibrating pharmaceutical protocols correctly can help create exactly the kind of preferential demand that local manufacturers need to justify investment in expanded capacity. The inverse is the entrenchment of existing incumbents while excluding regional entrepreneurs that the initiative is meant to empower.

This is a critical realization as the instinct of most policy makers is to invite private capital and then hope that systemic risk will resolve itself over time. It will not.

Market integration would further require speed operationalization of the African Medicines Agency (AMA). The current reality is that manufacturers often have to navigate over 54 separate regulatory frameworks in accessing fragmented African markets. Once fully operational, the AMA would create a single pathway. It is important, however, that this pathway does not replicate the worst elements of the existing fragmented system but replace it entirely. The pressure is on individual state to staff and fund the AMA adequately and the AfCFTA secretariat to ensure its operations are synchronized with trade protocol timelines.

Kenya’s Architecture of Ambition

Kenya has been on an accelerated push to upgrade its National Regulatory Authority to attain the WHO Maturity Level 3 certification to signal international confidence in quality, safety and efficacy of locally manufactured products. WHO prequalification requirements have long been cited as disproportionately burdensome for African manufacturers, particularly mid-sized firms that lack the financial depth to endure protracted compliance processes. This would remove one more layer of friction and open doors for locally manufacture products for recognition across regional markets without redundant re-approval.

The Kenyan president expressed continued commitment on positioning the country as a regional hub for pharmaceutical manufacturing, health innovation, and medical supply chains. Earlier, I indicated that Kenya was supplying around 50 percent of the COMESA region’s demand while simultaneously importing over 70 percent of the drugs used in its own public hospitals. This is a regional supplier versus domestic importer contradiction which is the irony of the country as is other African nations. If implemented AIM2030 would offer nations such as Kenya pathway to close the gaps. However, this requires investment in local formulation, packaging, and active pharmaceutical ingredient (API) production chain and not simply the final-stage assembly of important components.

Manufacturers require credible regulatory systems to access export markets, attract technology transfer partnerships, and reassure investors about quality assurance as week regulations create barriers to safety and industrial competitiveness. If the country strengthens its regulatory environment and leverages its logistics network, financial ecosystem, and the relatively advanced manufacturing base, it could eventually become a regional hub.

De-risking Must Precede Investment

The AIM2030 dialogue disclosed that demand risk and regulatory uncertainty are the primary deterrents to private investment in continental manufacturing. This is a critical realization as the instinct of most policy makers is to invite private capital and then hope that systemic risk will resolve itself over time. It will not.

Institutional investors, private equity funds, and development finance institutions are unlikely to deploy capital at scale without credible mechanism that de-risk both the front-end and back end. These include regulatory approvals, technology licensing, and infrastructure on one end and guaranteed procurement, receivables security, and export market access on the other respectively. Entities such as the Africa CDC, WHO, the Global Fund and individual nations must shift a greater proportion of their procurement toward locally certified manufacturers, even when it attracts a modest price premium in the short term. This way, the continent will save on health resilience, supply security, and foreign exchange preservation.

Commitments Must Have Deadlines

Moreover, only 14 years away, the 60% local production target by 2040 us laudable and challenging to realize. Notably so in a continent where initiatives are littered with ambitious targets that have dissolved quietly as political administrations turned over and donor enthusiasm waned. The actors around the AIM2030 ambition requires not just declarations but binding, time-bound, reviewable commitments with teeth.

Thus, national pharmaceutical manufacturing roadmaps with quarterly benchmarks are needed. Disbursements by the IFC and African Development Bank have to be linked to regulatory harmonization milestones. For instance, it implies that Kenya has to complete its WHO Maturity Level 3 certification on time. The African heads of state must also approve the AMA operational budget and not simply launch the charter.

My 2024 argument was that Africa had not yet scratched the surface but if the Summit is anything to go by, it is an indication of scratching that is starting in earnest. There is an inkling of a political consensus that is clearer that it has been over time with an economic reality that is irrefutable. What stands between Africa and its pharmaceutical future is not vision but rather willful execution. It is now time for the continent to manufacture the prescriptions that it has written enough for itself over the years.

Muoki Musila is an Kenyan based economist. These are the writer’s own opinions and do not necessarily reflect the viewpoints of Liberty Sparks. Do you want to publish in this space? Contact our editors at [email protected] for further clarification.