Recovering Zimbabwe Offers Growth Opportunities for Pharmaceutical Companies, Says Frost & Sullivan

Dec. 9, 2010 - PRLog -- CAPE TOWN – 09 December, 2010 – Recovery from a decade-long economic contraction has been the main factor behind the growth experienced in Zimbabwe’s pharmaceutical sector in the last two years. A new coalition government and subsequent macro-economic stabilisation have brought renewed optimism and spurred demand in healthcare markets. This is driving the uptake of drugs – a trend that is expected to remain robust in the future with the increasing availability of low-cost generic drugs.

New analysis from Frost & Sullivan (http://www.medicaldevices.frost.com), Healthcare Overview in Zimbabwe, finds that the pharmaceutical market in Zimbabwe earned revenues of $200 million in 2009 and estimates this to reach $370.6 million in 2016.

“A recovering economy, which has brought price stability and rising incomes, is behind the increase in expenditure,” notes Frost & Sullivan Healthcare Research Analyst Ishe Zingoni. “The increased availability of low-cost generic drugs, paralleled by the rising incidence of infectious diseases in the country, will boost pharmaceutical market development.”

Zimbabwe is in the midst of economic recovery, and rising incomes are already driving the demand for quality healthcare products. Economic growth, coupled with the greater availability of affordable generic drugs, will spur the uptake of pharmaceuticals.

Over the course of Zimbabwe’s economic slump, the country’s once vibrant pharmaceutical industry had shrunk by over 50 per cent, and by 2008, capacity utilisation stood at a mere 20 per cent. Although the economy has since recovered, significant challenges remain for local manufacturers, mainly in the form of lack of capital.

“The country has struggled to attract capital and access loan facilities from international lenders due to the government’s unfavourable credit record,” explains Zingoni. “Limited access to capital has therefore inhibited investment in new plants and equipment, and thus production levels have remained low. Without an optimally operating manufacturing industry, shortages of affordable medicines will remain unresolved.”

The direction of long-term policy in Zimbabwe and many countries in the sub-Saharan Africa is moving towards promoting local manufacturing of generic drugs. In that regard, foreign investors have an important role to play in the country’s pharmaceutical sector.

As the economy of Zimbabwe has now stabilised, the opportunity for international investors lies in the provision of business capital, with possible guarantees negotiated with the government.

“Injection of capital into local firms would enable upgrade of facilities, and thus unlock new markets, most notably donor-financed tenders and regional export markets,” concludes Zingoni. “A pre-requisite for suppliers wishing to tap into these markets is meeting WHO quality certification, standards which most local manufacturers currently do not meet.”

Healthcare Overview in Zimbabwe is part of the Medical Devices Growth Partnership Services programme, which also includes research in the following markets: Strategic Analysis of  Medical Imaging Devices in Kenya, Strategic Analysis of Medical Imaging devices In Ghana and Nigeria, Strategic Analysis of the Healthcare Industry in Kenya, Strategic Analysis of the Healthcare Industry  in Tanzania and The Medical Insurance Markets in sub-Sahara Africa. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

If you are interested in more information about this study, please send an e-mail to Christie Cronje, Corporate Communications, at christie.cronje@frost.com, with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country.

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Healthcare Overview in Zimbabwe
M5DC

Contact:
Christie Cronje
Corporate Communications – Africa
P: +27 18 464 2402
E: christie.cronje@frost.com

http://www.frost.com

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Frost & Sullivan, the Growth Partnership Company, partners with clients to accelerate their growth. The company's research and consulting services empower clients to generate, evaluate, and implement effective growth strategies.