Johannesburg-There are some green shoots of hope appearing in the wreckage of Zimbabwes healthcare sector, as a number of foreign companies are considering re-investing in the country, according to the latest Zimbabwe Pharmaceutical and Health Report. (Pictured: Morgan Tsvangirai)
The report, which was released this week by Business Monitor International (BMI), attributed this to the presence of the MDC in the inclusive government. The appointment of Morgan Tsvangirai as Prime Minister suggests that there has been a slight thaw in the political situation which could result in greater funds being made available for the health services. It is believed that the events of May 2009 when the World Bank resumed financial assistance to the country for the first since 2000 dramatically improved prospects for foreign direct investment in the country. London-listed investment house LonZim, which focuses its interests in Zimbabwe and Mozambique, has subsequently announced that it plans to establish a new firm that will import and distribute pharmaceuticals to Zimbabwe. Although the size of the investment is only small, it is believed that multinational drugmakers including GlaxoSmithKline (GSK), which previously had a presence in the country through sales, will have renewed incentives to export drugs through the independent firm set up by LonZim, the report read.
A renewed optimism also seems to have infected Zimbabwean pharmaceutical manufacturer Caps Holdings. In May 2009, the company revealed that it is ready for expansion into South Africa through the planned acquisition of an unnamed drug firm. The firm plans to obtain sufficient funds to purchase controlling stakes in a South African drugmaker by listing its shares on the Johannesburg Stock Exchange Pan African Board (JSE PAB). The JSE PAB allows other African and international firms domiciled in the continent to list, thereby creating a mature equity market. By also listing on this exchange, Caps will be able to sell shares and raise capital to acquire the South African firm.
BMI however pointed out that electricity outages would hamper the revival of the sector. However, the latest quarter has also provided plenty of evidence to suggest that domestic pharmaceutical production in Zimbabwe remains as arduous as ever. In July 2009, it was reported that frequent power cuts were forcing Bulawayo-based Datlabs to throw away large quantities of drugs. CEO Todd Moyo has claimed that when there are sudden energy shortages, the company does its best to sterilise the chemicals being manufactured, but is regularly forced to discard the half-finished products. As a result Datlabs has asked the Zimbabwe Electricity Supply Authority (ZESA) to provide it with advance notice when the power is going to be shut off., it said.
Zimbabwe is emerging from the downturn in the health services sector. Foreign drugmakers have previously refrained from supplying medicines to Zimbabwe due to widespread political unrest coupled with the deteriorating economic crisis. The 2008 cholera outbreak highlighted the failings and collapse of the healthcare system, with over 4,000 deaths as a result of the treatable condition. Consequently, it is estimated that the overall pharmaceutical market was worth US40.8mn in 2008. However, by 2013 the market will have contracted to a value of US$0.46mn, representing a compound annual growth rate (CAGR) of -10.33 percent.
Post published in: Opinions