Botswana Pharmaceuticals and Healthcare Report Q2 2012

BMI View: Botswana has a relatively well-developed healthcare market. Despite its small population, the country has one of the highest per capita expenditures on pharmaceuticals and one of the best business environments in the region. It has little corruption, there is political commitment to supporting business and it has low rates of corporation tax. It is also politically and economically very stable, with the highest credit rating in Africa and the third-highest rating for competitiveness. That said, the country has a weak tertiary education system, little by way of human capital in the life science industries and it is landlocked, which has an impact on imports and exports.
Headline Expenditure Projections
Pharmaceuticals: BWP1.42bn (US$217mn) in 2011 to BWP1.57bn (US$243mn) in 2012; +10.9% in local currency terms and +11.8% in US dollar terms.
Healthcare: BWP10.41bn (US$1.60bn) in 2011 to BWP11.55bn (US$1.79bn) in 2012; +11.0% in local currency terms and +11.9% in US dollar terms.
Medical Devices: BWP378mn (US$58mn) in 2011 to BWP443mn (69mn) in 2012; +17.2% in local currency terms and +18.1% in US dollar terms.
Risk/Reward Rating: In Q212, Botswana’s Pharmaceuticals & Healthcare Risk Reward Rating (RRR) has increased slightly to an overall score of 45.2 out of 100, overtaking Namibia and Iran in terms of the attractiveness of the market. It is 15th out of the 30 countries surveyed in the Middle East and Africa (MEA) and scores slightly above the regional average of 44.4.
Key Trends And Developments ?? In 2011, about 30 nurses were sacked for going on strike over pay negotiations. The workers are now looking to get employment in Namibia, reducing the pool of available healthcare workers in Botswana. Despite this loss in human capital, the government has reportedly given its blessing to the nurses leaving the country.
?? Botswana is looking to establish two new science and technology bodies to provide better oversight of the country’s research and development (R&D) programmes. One of these organisations will be the Botswana National Research, Development and Innovation Coordinating Council (BNRDCC), which will be chaired by the Minister of Innovation, Science and Technology and will focus on strategies to raise R&D funding. One of the BNRDCC’s roles will be to establish and manage a national research fund to finance research relevant to national priority areas.
?? Gemi Pharmacure, a 100% Batswana citizen-owned company, is developing the first fully integrated, state-of-the-art multiple complex facilities for the full manufacturing of generic pharmaceuticals in the country. It has commissioned NNE Pharmaplan (Novo Nordisk Engineering) to design the manufacturing facilities
BMI Economic View: The power outages that have affected Botswana are unlikely to stop in the foreseeable future because the lack of supply caused by reduced imports from South African company Eskom cannot be covered by domestic power generation. This is likely to put strain on the business environment and presents a risk to our inflation outlook.
BMI Political View: Upbeat rhetoric from high-profile figures and popular support from outside the unity process suggest the failed cooperation talks between Botswana’s main opposition parties could recommence. However, we are sceptical about any positive outcome from the cooperation efforts given the underlying fragmentation between the parties.