Africa must invest in local pharmaceutical production to improve access to medicines, reduce reliance on imports and build stronger, more resilient health systems.

More than 70% of the pharmaceuticals consumed in Africa are imported, mainly from Asia.

Local production exists in only half of African countries and is heavily concentrated – eight countries account for 85% of the continent’s approximately 690 pharmaceutical plants.

Most production is carried out by small and medium-sized enterprises with limited foreign direct investment (FDI), which makes up just 5% of global FDI in pharmaceutical manufacturing.

Framework for action: Impact, feasibility and incentives

The report presents a comprehensive investment framework based on three pillars: impact, feasibility and incentives.

• Impact: Nearly half of Africa’s population lacks regular access to essential medicines. Expanding local production can improve availability, affordability, safety and the stability of supply, especially for critical drugs like vaccines and antibiotics.
• Feasibility: Local production can be competitive with imports under the right conditions. For example, a study found that producing some drugs locally in Ethiopia could be 5% to 15% cheaper than importing them from India. The key is achieving scale, increasing plant utilization (currently 30% to 60% in many countries) and improving infrastructure and regulatory systems.
• Incentives: Policymakers must balance production-facilitating measures such as tax breaks with market-shaping tools like preferential procurement. Incentives should be tailored to local contexts and governed transparently. Strategic use of special economic zones (SEZs) can also support the development of manufacturing clusters. UN Trade and Development (UNCTAD) has also published a report on attracting pharmaceutical manufacturing to Africa’s special economic zones.

The report highlights four country clusters based on readiness: starters, prospects, followers and leaders.

It draws on field insights from a joint project with the East African Community focused on antibiotic production in Ethiopia, Kenya and Uganda.

Three policy priorities

The report highlights 10 key policy implications, focusing on three priorities:

• Align local production with health and economic goals through tailored strategies and well-balanced incentives
• Leverage incentives and FDI to integrate local industries into global value chains, supported by targeted infrastructure such as special economic zones
• Strengthen operational and regulatory frameworks by promoting regional cooperation and reducing barriers to create a more efficient, investment-friendly environment for the pharmaceutical industry.

Report by the United Nations Conference on Trade & Development