Ghana Pharmaceuticals & Healthcare Report Q2 2014.

 

Although our USD headline forecasts for Ghana in Q2014 have been revised lower, this is largely due to currency fluctuations.

We remain positive towards Ghana's healthcare and pharmaceutical markets over the long term. This is due to the government's commitment to the National Health Insurance Scheme, which is recognised as one of the best in the region, and currently covers over 36% of the population, according to Oxfam. The government continues to enrol more people and is undertaking steps to improve efficiency. In addition, the Prime Minister's commitment to manufacturing drugs for malaria, anti-retrovirals and TB, bringing in the expertise of German Development Agency and Novartis' Sandoz, will open up possibilities for regional exports and WHO pre-qualification for local manufacturers, while simultaneously decreasing reliance on drugs imported from India.

Headline Expenditure Projections

Pharmaceuticals: GHS708mn (US$343mn) in 2013 to GHS868mn (US$356mn) in 2014; +22.5% in local currency terms and +3.9% in US dollar terms. Forecast in local currency terms revised from Q114 due to currency fluctuations.

Healthcare: GHS3.77bn (US$1.83bn) in 2013 to GHS4.28bn (US$1.75bn) in 2013; +13.4% in local currency terms and -3.9% in US dollar terms. Forecast in US dollar terms downgraded from Q114 due to local currency fluctuations.

Risk/Reward Ratings

Ghana's Pharmaceutical Risk/Reward Rating (RRR) score for Q214 is 39.2, making it the 18th most attractive market in the Middle East and African region.

Key Trends And Developments

In March 2014, under a three-year development partnership with the German Development Agency, GTZ, Ghana's minister of industry and trade announced a project to produce key medicines locally. The project aims to increase human capacity development for pharmaceutical manufacturing, co-development and prequalification of key medicines against priority endemic diseases, including TB, anti-malarials and antiretrovitals.

The Ghanaian government also received support from the EU's Trade-related assurance and Quality Enabling Programme (TRAQUE) to increase the capacity of standards and regulatory bodies such as Food and Drugs Authority and the Ghana Standards Authority to ensure quality. An improvement in standards would be a positive development for patented drugs in the country.

In Feb 2014, Ghana was set to launch a Centre for Bio-equivalent and Bio-pharmaceutical Research (CBBR) in a bid to support local manufacturers of pharmaceuticals, importers and wholesalers to improve the quality of their products. The centre will help countries in the sub-region boost their efforts towards international certification. This came after the Ghanaian health ministry set up an interim technical committee in 2013 to develop a programme of work within a Public-Private-Partnership framework with technical and financial assistance from the German government through GIZ and the North Rhine- Westphalia Region of Germany.

In December 2013, the Ghanaian government made preparations to establish more specialist heath centres through public-private partnerships to help increase healthcare delivery in the country. In March 2014, the Minister of Health announced a new urology centre at the Korle Bu Teaching Hospital (KBTH) in Accra, to pave the way for kidney transplants and other complex renal surgeries in Ghana, Vibe Ghana reports. The Minster reported that less than 600 out of 8,000 renal failure patients in Ghana were receiving serious treatment because of the high cost and lack of equipment. The ratio of patients to specialists in Ghana is very poor, as most specialists are found in Accra, Kumasi and a few regional capitals, according to Senior Presidential Advisor Paul Victor Obeng. The government needs to increase the training of specialists in Ghana, he added.

BMI Economic View: We have revised our 2014 real GDP growth forecast down to 5.1% from 6.4% previously, owing to severe currency weakness, a sharp interest rate hike and new rules governing the use of foreign exchange. However, we believe the Ghanaian economy will enjoy strong economic growth over the long term, propelled by the nascent Oil & Gas sector.

BMI Political View: Ghana's political risk profile is relatively favourable, especially in the context of West Africa. However, oil revenues will require careful management, presenting a formidable test for the government over the coming decade. Our analyst in Accra surveyed perceptions of the performance of President John Dramani Mahama. Although there is some discontent, mass demonstrations are unlikely.

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