Kenya an attractive prospect for manufacturing, says study


Newly elected President Uhuru Kenyatta pledges to provide universal healthcare

Kenya is an attractive prospect for pharmaceutical companies looking to set up a manufacturing base in the region, according to a new research report from Business Monitor International (BMI), available from Fast Market Research.

Among the East African Community (EAC), Kenya has the deepest financial markets and an efficient manufacturing sector, as well as being home to the strategically important port of Mombasa. However, the report cautions that there are weaknesses in the business environment, most notably a high level of corruption, that can make it difficult for both local and foreign firms to conduct transparent operations.

In BMI\'s Q3 2013 Pharmaceutical and Healthcare Risk/Reward Ratings, Kenya is 20th in the Middle East and Africa (MEA), above Uganda, Nigeria and Zambia. A large counterfeiting industry, poor healthcare funding, corruption, regulatory deficiencies and a number of other issues will conspire to keep Kenya in a low position in the MEA matrix. Nevertheless, in comparison with many other African markets, most of which are not surveyed by BMI, Kenya offers more commercial promise and a more stable overall business environment.

Expenditure on pharmaceuticals is projected to rise from KES47.37bn (US$560m) in 2012 to KES55.36bn ($620m) in 2013; a growth of 16.9% in local currency terms and 11.8% in US dollar terms. Spending on healthcare will increase from KES149.71bn ($1.77bn) in 2012 to KES168.06bn ($1.88bn) in 2013; 12.3% growth in local currency terms and 6.0% in US dollar terms.

Kenya\'s newly elected President Uhuru Kenyatta has pledged to provide universal health care, stating that all health care and dispensaries should be accessible for free and no woman should be charged for having to have her delivery in a public institution.

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In April 2013, it was revealed that the government plans to open public health laboratories across the country, which will be implemented by the Ministry of Public Health and Sanitation. The laboratories will be built as part of a KES2bn ($22.90m) World Bank-funded East Africa public health laboratory networking project and will help in tracking communicable diseases throughout the nation. The national public health laboratory in Nairobi will also be revamped under the project, which itself is part of a larger KES5.6bn ($64.13bn) World Bank project aimed at developing a network of diagnostic laboratories across East Africa for the surveillance of tuberculosis and other communicable diseases.