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Kenya Pharmaceuticals and Healthcare Report Q2 2011
Business Monitor International, Feb 2011, Pages: 94
The Kenya Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Kenya's pharmaceuticals and healthcare industry.
In BMI's Q211 Pharmaceuticals & Healthcare Business Environment Ratings (BERs), the Middle East & Africa region scored an improved 48.0 (compared with a score of 46.4 in Q111) out of a possible 100. Despite scoring the lowest of all regions for the quarter, increased healthcare spending in the public (as governments increase the proportion of fiscal expenditure devoted to healthcare) and private (as economies grow and per capita wealth increases) sectors, improved access to health facilities, growing awareness of preventative healthcare and the growing burden of non-communicable disease will provide significant opportunities for drugmakers.
In BMI’s Q211 BERs for the MEA region, Kenya is in 18th place, above only Zimbabwe. A sizeable counterfeiting industry,, corruption, regulatory environment deficiencies and a number of other issues will conspire to keep Kenya in a similarly lowly position in the MEA matrix over the coming months.
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.
Economic growth and the resultant increases in Kenya's middle-class population will lead to rising demand for quality healthcare services as incomes improve. Recognising revenue-earning opportunities, private hospitals in Kenya have rolled out multi-billion shilling expansion projects in order to meet the current and expected growth in demand for quality healthcare services as the country's middle class population grows. The Aga Khan University Hospital, Nairobi Hospital, Avenue Group, Coptic Hospital, Kenyatta University, and AAR Health Services have all launched major development schemes that will see new branches opened and services broadened. BMI believes the investment into healthcare facilities by the private hospitals in Kenya is an advisable business strategy - we forecast health expenditure to experience double-digit growth between 2010 and 2015.
Like most countries, Kenya has a negative trade balance. The country's pharmaceutical exports reached a value of KES8,354mn (US$106.0mn) in 2009. BMI cautions that while trade figures are not indicative of pharmaceutical production in Kenya (the country has a long history as a trading nation; its location making it an ideal access point to the rest of Africa and in particular East Africa), Additionally, while Kenya is an access point to the rest of the community and therefore acts as a trade point, BMI believes the common market may increase the country's attractiveness as a location in which to establish drug manufacturing plants.
Of attraction to companies looking to manufacture products in Kenya, the country is also a part of the Common Market for Eastern and Southern Africa (COMESA), the increasingly influential 19-member economic bloc covering a large swathe of Africa, including South Africa. Kenya has also signed a variety of other economic pacts with other countries, notably China, which is rising quickly up the list of the country's trading partners. Kenya joined the World Trade Organization (WTO) at its inception in 1995.
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