AFRICA PHARMA CONFERENCE 2019 JUNE 4 – 5 2019 Johannesburg, South Africa

1. AFRICA PHARMA CONFERENCE 2019JUNE 4 – 5 2019Johannesburg, South Africa Department of Trade and Industry Frank Dixon MugyenyiSenior Industry Advisor Office of the Commissioner Department of Trade and Industry

2. Introduction • May 1963 = Organisation of African Unity - OAU • 32 governments upon signature of the Charter. • A further 21 states have joined gradually over the years, • South Africa becoming the 53rd member on 23 May 1994. • 55 – South Sudan and re-accession of Morroco • Mandate of OAU – • defend their sovereignty, territorial integrity and independence; • eradicate all forms of colonialism from Africa AND Unite Africa as ONE;

4. Introduction • 1980 Lagos Plan of Action -for the Economic Development of Africa, 1980–2000 - Mandate increase Africa's self-sufficiency. • 1994 Abuja Treaty establishing the African Economic Community by 2025. Articles 42 on Trade Promotion (Intra-African Trade), Article 43, Free Movement of Persons, Article 44 Free movement of capital, Articles 48 – 54 at least on Industrial development, science and technology, research and development and natural resources

5. Introduction • From OAU to AU –The Constitutive Act 2000 – with AUC as Secretariat of AU – Member States • Vision • “An Integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena”, • AUC working with other AU institutions such as AUDA and the RECs (as building Blocks), key stakeholders and Partners,

6. MVA in Africa • In 1980–2009, the share of manufacturing value added to GDP increased marginally in North Africa, from 12.6 per cent to 13.6 per cent, but fell from 16.6 per cent to 12.7 per cent in the rest of Africa. • By 2006 the share of manufacturing in GDP had declined to roughly 10 percent— the same as it had been in the mid-1960s • In 2017, manufacturing’s share of sub-Saharan Africa’s total GDP was just under 10 percent. . • In 2017, sub-Saharan Africa’s MVA was only about $145 billion dollars compared to over $40,000 billion in Asia and about $67,000 billion in OECD countries • Why

7. Post Colonial Industrialization trajectory • Africa’s industrialization has been weak and inconsistent. • 1960s – 1980 Africa’s Industrialization characterized by Import Substitution Policies – State Run Industries and enterprises sprung across the continent • 1980-20000 Industrial Development Decades (IDDA1&2), • 2000-todate – African Productive capacity Initiative (APCI), Accelerating Industrial Development for Africa (AIDA) and guess what IDDA 3

8. Industrial Development Decade for Africa IDDA 1 • Sixth Conference of African Ministers of Industry - CAMI 6 held in Addis Ababa, Ethiopia in November 1981 adopted the proposals for IDDA 1, • To respond to the objectives of the Lagos Plan of Action specifically devoted to translate the goals of the Lagos Plan of Action into industrial programmes and projects.

9. African Industrialisation Day • Within the framework of the IDDA 2 (1991-2000), the UN General Assembly, in 1989, proclaimed 20th November - Africa Industrialization Day (resolution 44/237).  • The Day is intended to mobilize the commitment of the international community to the industrialization of Africa.

10. Industrial Development Decade for Africa IDDA 2 CAMI 8 held at Bujumbura, Burundi, in September 1986, recommended the proclamation of a second IDDA, to accelerate the industrialization of Africa launched during the first one. The meeting also requested the Secretariats of ECA, OAU and UNIDO to undertake, in consultation with member states, African organizations and other relevant United Nations agencies, the preparation of a programme for IDDA II.

11. IDDA 2 • CAMI 9 held from 29 May to 1 June 1989, in Harare, Zimbabwe adopted resolution 2(IX) concerning the proclamation of a IDDA 2 and the formulation of a programme for the Decade. • The General Conference of UNIDO at its third session, adopted resolution GC.3/10 of 23 November 1989, on the proclamation of IDDA, and later the General Assembly, in resolution 44/237 of 22 December 1989, proclaimed the period 1991-2000the Second Industrial Development Decade for Africa.

12. IDDA 2 • The General Assembly in resolution 47/177 of 22 December 1992, adjusted the IDDA period to cover the years 1993 – 2002 stressing the need to integrate the programme for the Second Decade into the overall framework of the United Nations New Agenda for the Development of Africa in the 1990s, and • adopted the IDDA 2 including national, sub-regional and regional components of the Programme.

13. IDDA 2 • CAMI 12 held in Gaborone, Botswana in June 1995, in its resolution 1(XII) requested African countries, the Economic Commission for Africa (ECA), the United Nations Industrial Development Organization (UNIDO) and the Organization of African Unity (OAU) to undertake in 1997 a mid-term evaluation on the implementation of the Programme for IDDA2

14. Mid Term Review IDDA 2 findings • Sub-regional institutions which had been created to support the industrial development efforts had in most cases found to: • - lack adequate financial support; • - lack skilled manpower; • - lack financial incentive and motivation resulting into high turnover of competent staff; • - lack adequate support facilities; • - compete for external resources, functions/roles with other overlapping/duplicating institutions; • - lack co-ordination and harmonization of programmes between themselves.

15. Mid Term Review IDDA 2 findings • The absence of special mechanisms for the implementation, coordination and monitoring of the Programme. • The private sector in most countries is weak and incapable of assuming responsibility as principal engine of industrial growth. • Many governments now have policies and have introduced measures for private sector development by way of institutional support, training and establishment of consultative mechanism between public and private sectors on policy formulation and implementation.

16. APCI • CAMI (2002 ) requested UNIDO to develop another initiative • adopted the APCI by the AU HoS&G in 2004 as the sustainable industrial development component of NEPAD • Its primary aim was to increase the manufacturing value-added in selected industrial sectors identified in all five sub-regions in close collaboration with African Governments.

17. APCI at a glance • Build an African common vision of Productive Capacity • – based on the value chain approach • Highlight sectoral priorities as part of specific segments of the value chain • – based on comparative advantage • Harmonize industrial policies/strategies at national/regional levels – • based on cooperation/ collaboration • Facilitate implementation of the African Peer Review Mechanism on industrial performance/competencies • – based on benchmarking • Suggest sub regional programmes for productive capacity upgrading • – backed by a financial facility (APCF)

18. AIDA and IDDA3 • 2008 AU HoS&G adopted the framework for Accelerating Industrial Development of Africa and AIDA was adopted by CAMI 19 • 2016 IDDA3 - On 25 July 2016, the United Nations General Assembly adopted Resolution A/RES/70/293, proclaiming 2016-2025 as the Third Industrial Development Decade for Africa (IDDA III). UNIDO was tasked with leading the implementation of the Decade, in collaboration with a range of partners. • 20 CAMIs during the Import Substitution and State-run Industries, DDA 1 and IDDA 2 • 2 STCs SINCEIDDA3 56 years since the founding of OAU/AU

19. What Happened ? • What is the result?

20. Pharma and Industrialization - Facts • 70% of World Population with HIV are in Africa • 90% of World’s death due to malaria is in Africa • 79% of all pharmaceuticals in Africa are imported • Africa the world’s fastest growing pharma industry • Africa’s pharma market will reach $40-60 billion in 2020 and could reach a straggling $56-70 billion by 2030 (Goldstein research) • African Pharmaceutical manufacturing (not just local production) is the answer

22. Paradigm Shift”

23. 2013 – OAU/AU celebrated 50 Years . • Political Independence –– Not Sustainable • Next 50 years . • Economic Independence - Sustainable Development – African Renaissance • Agenda 2063 • "A global strategy to optimize use of Africa's resources for the benefits of all Africans

24. From Paradigm Sh’t to Paradigm Shift • “Agenda 2063” is an approach to how the continent should - • - effectively learn from the lessons of the past, • - build on the progress now underway and – • - strategically exploit all possible opportunities available in the immediate and medium term, so as to • ensure positive socioeconomic transformation within the next 50 years.

25. Critical Success factors of Agenda 2063 • “Bahir Dar Spirit” – Ministerial Retreat Pooled Sovereignty • Agenda 2063 Committee established • Catch – Up Hypothesis - Analogus to the Take – off of Airplane • Giant Leap – High Targets -Un-industrialisation an opportunity to acquire appropriate technology • Socio-economic structural transformation • Inclusive growth and sustainable development • Commodity Based Industrialization is the answer

26. Social & Econ Structural Transformation 2039 - 2063 Innovation & Knowledge 2013 - 2038 Technology & Efficiency Factor Driven Social and economic Structural Transformation

27. Current Frameworks and Initiatives • Frameworks • AfCFTA Agreement in force since 30th may 2019 • Initiatives • PIDA - Infrastructure - Flagship – “High Speed Train Freeway project” • AIDA – Industry - Flagship – Commodities Strategy • AMV – Mineral Resource Development • PMPA – Pharmaceuticals Manufacturing Plan of Action • 3ADI – Agri- Business and Agro-Industries • IMP – Investment Monitoring and Industry data

28. AfCFTA and Industrialisation • The African Continental Free Trade Area (AfCFTA) that came into force on 30th May 2019 is a single market for goods and services in Africa that aims to unlock manufacturing potential and facilitate industrialization, driving sustainable growth and jobs among other objectives. • Africa to be “the world’s next great manufacturing center”, potentially capturing part of the 100 million labor-intensive manufacturing jobs that will leave China by 2030.

29. Opportunities of AfCFTA and Industrialization • If all 55 counties join, this will be one of the world’s largest free-trade areas in terms of the number of countries, covering more than 1.2 billion people and over $4 trillion in combined consumer and business spending. • By 2030, business-to-business spending in manufacturing in Africa is projected to reach $666.3 billion, $201.28 billion more than in 2015 • Domestic companies spent roughly $2.6 trillion in 2015, half of this on materials, and the total expenditure is expected to rise to $3.5 trillion by 2025 • Africa’s manufacturing sector is predicted to double in size, with annual output increasing from $500 billion in 2015 to $1 trillion in 2025 and creating an additional 14 million stable, well-paid jobs.

30. AfCFTA and Industrialisation • The potential for the AfCFTA is big for both structural transformation and poverty alleviation in Africa. • This requires key policy prescriptions and interventions that will attract private investors, accelerate manufacturing and industrial development, and contribute to growth and poverty alleviation, facilitating the fulfillment of the Sustainable Development Goals and the African Union’s Agenda 2063. • While policy solutions are likely to differ across countries, manufacturing and industrial development will be central to Africa’s ability to meet its development goals.

31. Key Drivers of Industrialization • Resources (Natural Resources and Human capital) – Resource led industrialization- stop hemorrhaging of Africa’s assets – (Human Capital MUST be healthy) • Conform, Compete and Connecting to markets • Technological Development, can Africa Leapfrog including Industry 4.0 and Artificial Intelligence • Domestic Demand as manufacturing Increaes so do the Middle Class through decent Jobs.

32. AUC At work • Coherent Policies –Industrialisation, Trade and Finance Policies –Developed, Coherent and harmonized at sub-regional and continental levels • Based on Value Chain Approach and Benchmarking • Private Sector and Institutional Development and strengthening - • to attract investments in key sectors including Pharmaceuticals Key recommendations

33. Infrastructure – energy, transport and communication • Quality Infrastructure – standards, conformity, (Not to crownout our SMIs and SMEs) • Trade facilitation and other instruments such as RoO the allow Regional value Chains to develop (free movement of the Factors of Production across Borders) • Information and Business Intelligent including Artificial Intelligence (AI) as we go into Industry 4.0 – Data – Investment Monitoring Platform - IMP

34. Alternative Resource Mobilization – for Industrialisation • Science and Technology • R&D – Innovation IPRs (including for Traditional Medicines) • Incubation – • Equity Finance • Venture Capital • From “AID” Africa is dependant on AID • To “PAID” for its High End Value Added Resources goods and services • Requires a Paradigm Shift