Live on Bloomberg TV

00:00I really want to take the next few minutes to talk about how we can build up the pharmaceutical sector within Africa the domestic pharmaceutical sector and I came across one statistic when I was prepping for this session honestly which startled me and I wanted to share that with you. If you look at Africa India and China we're talking about populations of over a billion people right. One point two one point four billion people. India has 10000 drug manufacturers for its one point to one point three billion people. China has 5000. Obviously I'm going to say Africa is a lot less. Any idea how much. How many drug manufacturers there are in Africa to serve over a billion people. Sorry how many. One hundred. Really pessimistic. Anybody has any idea you want to throw out a number. Okay. Show of hands below 5000 or above 5000. Below three thousand. Below 3000 below 1000. OK. Three hundred and seventy five. Right. So that's really really really low. There's a lot of work to be done. And it's no wonder then right that you think Africa imports most of its medicines. And depending which part of Africa and we are importing anywhere between 70 to 90 percent of the medicines are imported into Africa. So against this backdrop Steve let me begin with you. What do you think has been the biggest learning for Africa from the pandemic. I mean the biggest learning possible. Thank you for having us. The biggest learning for us in Africa is you need to have your own supplies to be responsive to be to be able to plan. But the biggest lesson I suppose is if you're overly reliant on other countries other partners for your vaccines you're always at the back of the queue. Right. So as you said a population of one point two billion to be importing up to 90 percent 99 percent of your vaccines. It's very difficult for you to assure your populations of health security. So you can't have the health security that other parts of the world enjoy. Absolutely. I mean how much do you want to add to that. What if from your point of view from Standard Chartered which of course is one of the sponsors of this event from standard charters point of view. What was your biggest lesson on learning from the pandemic. Thank you. Mallika to start with I'm an optimist. So there are some green shoots over there. I'm sure you and some of the other colleagues in the room will be familiar with some good work being done by South African pharma company Aspen where Johnson's right limited in scope and didn't take off as widely as prolific as phys ed and Dana. But good beginning but data you mentioned in starting the conversation is startling. I saw the same data and was shocked right. I think NIKKEI and I'll come to the work Stan Grant has done and I'll briefly touch upon it. I think though with all the challenge specific to this point which feeds into some of the other points when you talk about the trade corridors Africa has with the world and Africa Free Trade Agreement we will come to that is the same challenge where Africa is reliant. On importing from abroad. Right. In the most remarkable and significant way and that has been manifest in this crisis now. Thank God the pandemic didn't affect Africa as badly as affected some of the other parts of the world. We're quite blessed with that and made to a million remain that way. But the challenge is the infrastructure in terms of technology health care support base in Africa is really weak. Right. And the backbone to support that infrastructure is not there. So commenting very briefly on stand charged we were part of a number of concession and financing facility. One was specific to a vaccine procurement acquisition and distribution where we partnered up with every Exim partner and DFA in Africa. And the other one was a global program where we came up with the billion dollar concession and financing. And overall Africa at least contribution from that facility was around 300 million dollars where we went out and gave gave out concession funding an entire cost to companies and businesses who were helping with the pandemic with BP with vaccination with all kinds of the pandemic support infrastructure. You know one thing you mentioned and I'm again that surprised me and we talked about this yesterday briefly the Aspen Pharmacare facility that's open in South Africa which is to manufacture Johnson and Johnson vaccines. I've been reading reports. You said it hasn't taken off having reading reports. It hasn't been a single order. Why Steve why do you think that might be the case. Well I mean I think it'll be difficult to to answer the why without speculating. I'll try not to speculate. But I think just two things I'd want to mention is we wouldn't want to see partners support manufacturers within the continent especially the Matt Miller the partners that are supplying the same vaccines to the continent's ISE. The second thing is the ecosystem. We have to look at manufacturing as part of a wider health ecosystem. Correct. So the science is just the beginning. You need to be able to move the science to the people that need it the most. So the ecosystem what you said the backbone we need that right. What do you think needs to be the first thing to address. I mean there are so many things you said scientists at the beginning from your point of view was the first stepping stone. So a couple of things. Malika in no particular order in the audit a state may not be the right idea. But for me. Technology transfer. Yeah. See when you look at Africa the challenge today is. Africa exports a lot of raw products. And imports finished goods. Mm hmm. Right. And that's the backbone of the challenge right. Where they they're exporting crude. And importing refined products. Are exporting copper and they're importing finished products from cars to everything else. Right. Cables. And that is to me the Genesis basic code ingredient which needs fixing. Now there are good steps in terms of Africa free trade agreement. And if you look at just to throw out some of the numbers 20 19 data. Africa imported roughly 600 billion. That about across the continent. Twelve percent of that import was in trafficker. That's the other Africa in Africa right. Only 24 percent. Right. Is one country the biggest country or one sector the biggest sector. The card after island gas the biggest importation was cars. Africa imported cars worth 20 billion dollars 20 billion U.S. dollars 40 billion in the case of Nigeria alone. And the local component was 3 percent. Really. Yeah. Yeah. So this is what I'm talking about. You pick out any country I can give a number of examples. Oil is being exported out by a number of oil exporting countries. Raw crude oil and refined finished products at importing n so a number of countries not to name names. I did not seeing the upside that we have seen in oil and gas prices over the last couple of years to the same dimension because the big spike is in the refined products and that not getting the the upside drained or to the extent they're getting the upside. In the crude products export they have to pay back most if not all if not more than all in the case of when they import back their refined product. Right. So that is the challenge. There needs to be addressed. I think a couple of other points and stop me if you think I'm speaking too long. I think. Technology transfer which was my first point. The second is in traffic trade. Now a component for our intra Africa trade to flattish. And there are bureaucratic components and there are actual. Consent. A lot of the African governments. Take tariffs on trade. So they should right bet on margin. The system needs to evolve and develop to a level where the bleed out from their import compensates for their tariffs that they're getting. Right. That requires cooperation that requires trust and that requires working together with with the partners across the 50 51 African countries and the global trade partners. The third component is the one where we as a bank Standard Chartered are quite active is the infrastructure. Overall for technology transfer. You need help from the developed countries right. The G-7 due 20 plus India China. The most sophisticated economies whether you're talking pharma whether you're talking poverty you are talking sustainable energy whatever else you have. So there is the technology transfer component which you cannot deny. But in addition to their technology transfer do you need private on the ground. Yes. If you want to run these to run these industry. Right you need a digital backbone infrastructure Wi-Fi telecom sophistication to to connect to the cloud. Right. To connect to the global centers. So that requires investment dollars and that requires infrastructure investment. We are delighted. We are contributing and playing our share. But that needs to multiply reach to the power 20. In my view. The third thing is and they're a good example. So we are delighted to. Dan go ahead of finery as in when it comes on line towards the end of this year or early next year. Do we know what their timeline ill is will address. Will address the first point I was mentioning the Africa export crude and imports refined. So once you have then go to a refinery up and running. Yeah they will be refining their own crude. And not only using in the domestic market which is the biggest market in Nigeria but exporting to other countries across. But the last point and I'll finish over there is that the infrastructure. To to move goods across borders needs to be developed. The flight connectivity from one country to another needs to improve in some cases not all the cases. You need to go to a tight third hub and then come back to a neighboring country. Current number of examples more than one I can code should. Those would be the kind of things when you talk about the broader infrastructure ecosystem would be password would be digital communications and would be dead road make with the bridges the rails and the safety and security to be able to use that infrastructure safely secured correctly. It all creates that ecosystem. And Steve yesterday when we chatted you said something very interesting. You said for Africa to not be at the behest of the West. Yes. We have to make our own medicines. And you wish during the pandemic that one of the Western companies had perhaps shared their recipe so that you all could make your own vaccines. Absolutely. But without this infrastructure in place that some others just pointed out would Africa have actually been able to make those vaccines even if you were given the recipe. Absolutely. I mean if you just look in the last few months there communicate you know the information that's coming out of South Africa and the research work that's been done by researchers in South Africa to replicate as MRI may vaccine it shows that the capacity and capability is that the question is is are partners you know willing to help accelerate that process. And this is why for the lot we know for a long time we've been calling for companies in the West to share field and to share the knowhow and technology to give Africa a chance to be self sustaining. So to answer your question want 1000 percent. I think Africa is in a position to do so. Africa needs the support and the conversation has already progressed. So if you look at what the EU has put together as a strategy to produce up to 60 percent of its own vaccine needs within the continent. You know the framework is that it means more investment in R and D more investment in capabilities better regulation better sharing across the countries as you say better trade policies. So it's all of that. So that the bigger question is are partners who partner with us for many years to come on board and help accelerate that process. So that's that's that's the fundamental piece. The second piece you know to to to add to the points that were being made just now is the wider ecosystem. So you've got infrastructure you've got the supply chain but you also need the health workforce. You need health workers that are trained that are capacity to the water that are incentivised to administer the vaccines. And then you also need communities that are mobilized and have the information so that they present themselves when these supplies are available. So I think you know it is a challenge to look at manufacturing in isolation. I think we need to take a step back and evaluate the entire ecosystem. So you're saying that even if you had got the recipe from the West from other companies you would have been able to make the vaccines in Africa 1000 percent. Sure you would have been able to do that. I guess the next question would be if you didn't get the recipe you need to reach a stage where you can create the recipe yourself. Right. So you're not dependent on other countries to share the secret sauce. What do you need for that. Are we looking at huge investment in R and D education. Prevent the brain drain. Yeah so talk to me about that. The absolute. Let me say again to to your previous question. You know my optimism is driven by the evidence we've seen. The work happened in South Africa being able to replicate modalities vaccines. So if that's possible without more involvement then that demonstrates that actually with a bit of support. You know if collectively that process can be accelerated. Yeah. And to you. To you to you. What was the question of just us just saying that you know we need to reach a stage where you can create the recipe yourself. So we looking at. We need more investment in R and D in research. Yeah absolutely. Absolutely. I think you know ultimately it's also you know a supply and demand question. Right. So you do have players that want to come into this space but perhaps a slightly cautious about every time on the investment you know research. ISE is expensive. So yes we want to invest in these areas but we need to make sure that the that the market is that we need to provide collectively as Africa that assurance that you know to manufacturers that if you make this investment you know that there is a market for you. And that means pooling mechanisms pooling procurement mechanism. But it also means partners that supply largely the continent with vaccines and medicines to really tap into that African market as well. So I want to talk to you about human capital. I mean obviously a healthier population means and we're not just talking about medicines for vaccines for call that you know we're talking about the pharmaceutical industry as a whole. So a healthier population means a healthier workforce which then of course will have a trigger effect and have economic output. Right. So talk to me about the importance of human capital and how developing a local pharmaceutical industry can actually have the GDP. Well listen I think my alligators existential in my view. Yeah. And also if I were to expand the scope of the question I think it goes beyond the pharmaceutical industry into every facet of human life. It's all about human capital right. My business out of business the business of banking the business of trade finance government everything. Everything. It's existential to do have the right framework. Gates. As important as safety and security and education the next one is to to have the right ingredients to have develop people who are healthy who are secure and who have the right technical educational background to be able to support the growth of their economies and contribute to every segment every facet of the country of the economy. The. I just want to quickly go back to the free trade it's been on my mind that I mean they spoke about it and I think that's after the important. So Steve from your point of view how much of a game changer will that be to allow sort of smaller manufactured smaller pharmaceutical companies manufacturing medicines in Africa by having that free trade agreement. How much of a game changer will be for will that be for those companies who want to achieve scale. Because it's not worth it if you're not going to have a chance to achieve scale right. Exactly. But I think you've you you've touched on it. It is an incentive. It's an incentive because it means the environment is enabling. You know ultimately what he tells them is if there's a there's a market for your product. But not only that it means that the regulation and the policies will be conducive for you to do business. So it's it's a compelling case for four manufacturers that I perhaps have been discouraged previously. And this is why we also call on partners that supply the vaccines and the medicines to the continent largely to tap into that market. I think that's a significant part of it because you do have countries that are still reliant on this donations whether you're thinking GAVI Vaccine Alliance. So if GAVI taps into that market it's really encouraging for footfall for the players within within the continent. You know this awareness and realization that Africa needs to be manufacturing its own medicines. This isn't new. We've been talking about this actually for decades. But do you think the pandemic is a turning point and do you think we're actually going to see a difference being made now. Steve I'll go to you first and how much I'll come to you for the last word after this. Absolutely. I think what what the last two and a half years have shown Africa is yet you cannot have political security economic security without health security. I think that's been significantly clear. I think it's also been very clear that you cannot be overreliant on partners on good will for you to try to deliver on health security. So I think that is a turning point. And we've seen a lot of players and stakeholders and governments collaborate and come together and really develop a if a framework that's clear that stipulates this is where we want to go. We want to be able to produce at least 60 percent of our own vaccines by this year. And this is how we get. This is I would get that. This is what we expect from from our other partners and stakeholders. What we've seen as I'm sure you know I'm African led organization that works across many African communities to to address the barriers that keep communities from accessing good health is also the idea that you do need to have a resilient health system. You do need to have that supported workforce. You need to have all these things in place for you science to be to be effective. So my last word from you from what you're hearing and seeing on the ground in Africa are we at a turning point. Is this is a pandemic going to be what it takes to actually really create that change in Africa and really give the local manufacture the pharmaceutical industry the impetus to change. Most certainly I think and I would again add to the comment which I said before on a couple of themes I think in the entire world Malik ISE in quite a unique place in terms of lessons from the pandemic we have seen over the last two and a half years. The development which had a black swan event. Honestly no one of us imagined ident that you will see the kind of backlogs that we have seen in the last two and a half years. The kind of shortages you have seen in the last two and a half years. The lump paper backlog and delayed the boats you have seen. So I think it's a lesson for the entire world. In every sector in every segment farmers have to tackle is existential from a healthcare perspective. Absolutely. There a lesson to be learned by everybody. It's a wake up call. It's a wake up call. And it's a wake up call. And I see a lot of green shoots and a lot of positive takeaways. We fast through a very tough to two and a half years. The world is coming out and with a lot of good lessons. Well that's a good note to end on green shoots of recovery all around. Thank you farmers. Thank you very much. Thank you.

No schedule data available.

Africa’s Public Health Paradigm

Sarmad Lone, Regional Head, Client Coverage Corporate, Commercial & Institutional Banking Africa & Middle East, Standard Chartered Bank and Steve Murigi, Head of Programmes & Partnerships, Amref Health Africa UK speak with Bloomberg’s Mallika Kapur at the Bloomberg Invest: Focus on Africa event. (Source: Bloomberg)

Bloomberg Technology
The only daily news program focused exclusively on technology, innovation and the future of business from San Francisco. Hosted by Emily Chang.
More episodes and clips