Local manufacturing for health in Africa in the time of Covid-19: experience and lessons for policy

Banda, Geoffrey; Mackintosh, Maureen; Kale, Dinar; Mugwagwa, Julius and Wanjala, Cecilia (2021). Local manufacturing for health in Africa in the time of Covid-19: experience and lessons for policy. DEGRP, Overseas Development Institute.

URL: https://degrp.odi.org/publication/webinar-report-l...


In Africa and across the globe, the Covid-19 pandemic has demonstrated the fragility of manufacturing supply chains, particularly in relation to essential commodities for healthcare. It has forced a global recognition of local manufacturing and supply chains’ centrality to local health security. This report summarises findings from a webinar, hosted on 28 October 2020, which brought African manufacturers in health-related industries together with engaged academics in India and Africa, and other professionals working on the regulation, distribution and industrial support in African countries. The webinar aimed to capture the immediate experience of manufacturing under Covid-19 conditions in Africa and India and to draw lessons for policy.
The central argument is that broad-based industrial development is critical for local health security in Africa; this is the post-Covid-19 medium-term challenge. As the pandemic unfolded, African manufacturers experienced the collapse of input supply chains, with vertiginous increases in imported input prices alongside escalating freight costs. Buyers’ payments slowed, exacerbating the financial squeeze on manufacturers. Lack of local input suppliers, especially in active pharmaceutical ingredients (APIs), medical grade fabric and plastics, and high-quality packaging, alongside weak local testing and accreditation capability, constrained local manufacturers’ outputs just as demand escalated. Nevertheless, the webinar identified an impressive range of scaling up and product innovation by African manufacturers to meet local pandemic needs.
Four core lessons, were identified. First, broadening and deepening the African industrial base is essential to reduce the concentration risk that arises from reliance on a small number of largely external suppliers of essential items. More local suppliers, new industrial collaborations and stronger backward linkages in the health industries are all required. Industry associations can act as brokers or intermediary institutions, facilitating knowledge renewal and promoting linkages between critical sectors.
Second, this industrial deepening requires better collaborative capabilities among multiple actors such as the private sector and governments, including through public-private partnerships (PPPs). Countries that reacted fast to the pandemic crisis have displayed capacity to collaborate, co-learn and co-solve old and new problems across industry, academia and government: this momentum must be sustained.
Third, this in turn requires strengthening and re-thinking the role of the public health system in stimulating local industrial development, through innovative procurement, assured markets for local manufacturers, and shaping technological upgrading. Local health systems can and must develop more agency, power and leverage in shaping local industrial and technological development.
Finally, centres of excellence can provide the infrastructure that is needed in African regions to support quality improvement and technological capability upgrading in emerging industrial clusters. This includes enhancing scarce skills, providing patient funding at scale, market development, innovation and supply chain strengthening.
Indian experience during the pandemic confirms the importance of a broad industrial base, sustained local engineering knowledge and opportunities for rapid adaptation and collaboration across industrial sectors. Negative lessons included the relative neglect in India pre-Covid-19 of service sectors such as cold-chain storage and delivery. Indian experience also identifies the importance of active contestation for policy effectiveness, through challenging engagement in policy debate by diverse stakeholders.
Finally, India-Africa collaboration remains relatively weak: African market integration and policy shifts could improve the incentives for Indian investment in Africa in the medium term. Covid-19 has been a wake-up call for the importance of local manufacturing for health in Africa, but what will it take to stay awake? Participants identified priorities for sustained investment in institutions to support industrial development at national and regional levels. These included stronger testing-regulation-accreditation processes for new and upgraded outputs, as well as better industrial finance to support innovation and technological development. Policy capabilities for active problem-solving could be strengthened by effective contestation and policy learning, including an active role for industrial associations. The report concludes by identifying further research needed to support integration of industrial, institutional and health policies for managing public health security risks in African countries.

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