Tuesday, October 27, 2020

Botswana heavily reliant on drug cocktails supplies

Botswana will remain attractive to pharmaceutical companies as the country’s pharmaceutical trade deficit is expected to widen further – a report released last week by analysts and researchers atA Fitch Solutions report has revealed that despite sharp gross domestic product (GDP) contractions, government spending on health-care is expected to increase. Botswana will continue to rely on imports for pharmaceuticals.“Generic medications will continue to dominate Botswana’s pharmaceutical market, however, opportunities for local manufacturing remain limited. Botswana’s economy will contract sharply this year, with GDP falling by 6.8% in real terms.

This would be the worst year for the economy since the global financial crisis in 2009 and one of the biggest declines in output seen in Sub-Saharan Africa,” the report warns.In part, the report says, this reflects the fact that Botswana is a small, open economy that is heavily affected by external shocks. The report noted that Botswana’s government has rolled out a fiscal support scheme equivalent to 1.1% of GDP.“The authorities are providing limited wage subsidies to some workers, loans to businesses and tax deferrals to much of the economy. We have maintained our healthcare forecasts and expect healthcare expenditure to increase from BWP13.42bn (USD1.24bn) in 2019 to BWP23.47bn (USD1.88bn) in 2024, representing a compound annual growth rate of 11.8% in local currency terms,” the report says.

The report says pharmaceutical imports in Botswana grew 25.8% in local currency terms to a value of BWP1.4bn (USD126.4mn) in 2019, with exports shrinking 13.2% and totalling just BWP89.3mn (USD8.3mn) in comparison. “Over 75% of imports originate from South Africa and India according to 2018 UN Comtrade data, with most exports going to Namibia and Zimbabwe. The growing presence of new low-cost competitors (largely from India) will add to the threat facing regional drug makers’ performance in Sub-Saharan African markets where affordability levels are particularly low, such as in Botswana,” the report says.

It says South Africa-based Adcock Ingram and Aspen Pharmacare Generics are key suppliers of Botswana’s pharmaceutical market, but their market share will be threatened by India-based drug makers, such as Cipla and Cadila.“We forecast pharmaceutical imports to reach BWP2.1bn (USD168.5mn) by 2024, corresponding to compound annual growth rate (CAGR) of 9.1% and 5.9% in local currency and US dollar terms, respectively,” the report says.Analysts and researchers at Fitch Solutions also observed: “With the local pharmaceutical market expected to remain minimal, we forecast export growth to slow over the medium term, reaching BWP150.8mn (USD12.1mn) in 2024, with a CAGR of 11.0% (7.8% US dollar terms). This will further widen the pharmaceutical trade deficit, which is expected to reach BWP1.95bn (USD156mn) by 2024.” 

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The Telegraph October 28

Digital edition of The Telegraph, October 28, 2020.