The FDI angle:  

• In March, biotechnology company Moderna finalised an agreement with the government of Kenya to establish a messenger RNA (mRNA) manufacturing facility in the country.
• German biotech company BioNTech is building a manufacturing facility in Rwanda to support the production of African mRNA vaccines, and plans to establish factories in Senegal and South Africa, too.
• To attract FDI to meet the continent's vaccine self-sufficiency targets, governments need to "come to the party" by creating frameworks to incentivise local production, says Patrick Tippoo, head of science and innovation at Biovac.

The Covid-19 pandemic was a loud wake-up call for the African continent. The likes of Pfizer and Moderna were able to develop effective vaccines relatively quickly, but African countries languished behind the rest of the world in securing access to them. 

Their struggle set in motion local and regional efforts to develop local value chains of vaccines and other key pharmaceuticals. At the moment, Africa’s performance is dismal. The continent supplies less than 1% of its own vaccine demand, according to estimates from the African Union. 

There have been investment wins suggesting potential for progress. However, experts argue that Africa needs long-term strategic co-operation between its governments to develop fully-fledged regional value chains able to meet the internal demand for vaccines. 

New hope 

In March, biotechnology company Moderna finalised an agreement with the government of Kenya to establish a messenger RNA (mRNA) manufacturing facility in the country. 

mRNA provides a way for DNA information that cannot be directly decoded into proteins to be copied, and was used in the development of vaccines for Covid-19. 

Moderna believes the Kenyan agreement will enable the production of up to 500 million doses of vaccines each year, and will provide drug substance and drug product manufacturing for Kenya and the continent. Its mRNA platform is “uniquely suited for rapid response to serious international epidemics”, the company said in a press release published in March. 

Meanwhile, German biotech company BioNTech is building a manufacturing facility in Rwanda to support the production of African mRNA vaccines. Initial production capacity will be about 50 million doses a year, and the company also plans to establish factories in Senegal and South Africa. 

Partnerships for African Vaccine Manufacturing, set up by the African Union in 2021, aims for 60% of vaccine demand to be supplied from within the continent by 2040. 

Securing demand certainty

While foreign direct investment (FDI) will be crucial if that target is to be met, the ability to attract investment is compromised without “demand certainty”, for example through periods of protected market access for manufacturers, says Patrick Tippoo, head of science and innovation at South Africa’s Biovac, a biotech firm and vaccine manufacturer based in South Africa, without which “we are all wasting our time”. 

Governments need to “come to the party” in terms of creating frameworks to incentivise local production, says Mr Tippoo, who is also executive director of the African Vaccine Manufacturing Initiative. 

He points to the experience of South African drugmaker Aspen Pharmacare, which had a contract with Johnson & Johnson for 250 million doses of Covid-19 vaccines but failed to secure the expected orders from African governments. 

The continent needs to build a business case for routine vaccine production able to compete with imported vaccines. That is the “stepping stone” for being ready to respond in pandemics, Mr Tippoo says. “You can’t do it simply with a pandemic in mind,” he adds.

Research from Biovac and charitable foundation Wellcome this year argues that African producers will have to compete with low-priced vaccines from pharma and biotech hubs in other developing countries like India, where scale and efficiency allow for very competitive productions. 

On the other hand, in Africa “a high-price and low-volume trap” persists and needs to be overcome, the research says, finding that African manufacturing initiatives remain “unco-ordinated”, creating a risk of overcapacity. 

The research thus argues that a mechanism will be needed to cover part of the extra cost until the African biotech industry reaches the level of scale and efficiency of its competitors around the world. It also proposes the introduction by the global vaccine alliance Gavi of a minimum share of African supply, as well as a continental pooling arrangement to lock in demand. 

More talent, better rules 

It is not realistic for the continent to have manufacturing capacity in every country due to the infrastructure needed to support it, says Neelika Malavige, head of dengue disease at the Drugs for Neglected Diseases Initiative. 

The best approach is to identify countries with the potential to supply the whole of the continent, Ms Malavige says. Senegal, for example, looks “very promising” as a location for manufacturing yellow fever vaccines. 

But a major barrier to FDI for vaccine manufacturing on the continent is a lack of trained staff, says Nafisa Jiwani, managing director for health initiatives at the US International Development Finance Corporation. 

“Building that workforce is critical,” Ms Jiwani says. She points out that India’s rise to become a vaccine manufacturer took more than 40 years of investment in education to achieve. “It is and should be a long-term process,” she adds.

Protected market access, Ms Jiwani says, can help create incentives for technology transfer, and there also needs to be a strong regulatory environment to allow countries to export. There are signs of progress. The South African Health Product Regulatory Agency (SAHPRA) has reached the World Health Organization’s maturity level three for vaccine regulation. This is a prerequisite for local manufacturers being able to export their products. SAHPRA aims to reach the highest maturity level of four by the end of 2025. 

Those behind the African Continental Free Trade Area, a free trade agreement between 55 African countries that came into force in January 2021, are also working to enable intra-African trade of vaccines and other pharmaceuticals. 

“Africa imported $16bn-worth of pharmaceuticals in 2019 alone,” secretary-general Wamkele Mene told fDi Intelligence in May. 

“So if we have an appropriately tailored import substitution strategy, that $16bn should actually be staying on the African continent. We are establishing the rules that enable the likes of BioNTech and Moderna to set up and think that it’s not just about the domestic markets in Rwanda or Kenya. What they have access to is a market of 1.3 billion people.” 

The way forward

A broader biotech industry is needed to be able to support vaccine manufacturing, Ms Jiwani adds. One way forward is for countries to start off with vaccine packaging and distribution, before moving on to “fill and finish” in which bulk drug supplies are parcelled out into doses. 

Mr Tippoo at Biovac argues that African governments must be willing to pay more for vaccines manufactured on the continent. The greater cost compared with Indian vaccines, he says, needs to be seen as an “insurance premium” to allow security of supply, rather than as an extra cost per dose. 

India, he says, was able to become a large-scale vaccine producer by granting preferential market access. India as a single state is more easily able than Africa to manage production between different regions, but African governments must find a way to replicate that degree of co-ordination, he concludes.

David Whitehouse is a freelance journalist based in Paris.

This article first appeared in the August/September 2023 print edition of fDi Intelligence.