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African Pharmaceutical Regulations: The African Medicines Agency and the Push for Harmonization

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Welcome to the last installment of our Africa supply chain series. Part 1 talked about geography, demographics, and the economy, and Part 2 was about challenges and opportunities. Today, we’re tackling the complex landscape of African pharmaceutical regulations.

Specifically, we’re looking at the African Medicines Agency (AMA), envisioned as a single regulatory body that would cover all 54 countries on the continent. It’s a big topic, but we’ll break it down into easy-to-understand terms. Let’s get started.

African pharmaceutical regulations: defining the key players and terminology

To understand African pharmaceutical regulations, you have to know the key players and be familiar with some core vocabulary. Today, we’re talking in broad terms to establish some baseline knowledge; if you want to know more about any of the entries below, just click on the linked text.

African Medicines Agency (AMA): According to its business plan, the AMA’s vision is “a healthy African population with access to quality, safe, and efficacious medical products and technologies.” It was established in January 2015 and officially began in November 2021 after 15 countries signed and ratified the AMA Treaty and deposited their instruments of ratification with the African Union Commission (see below). The AMA does not yet have a website; visit the African Union website for more information.

African Medicines Regulatory Harmonization (AMRH): Formalized in 2009, the AMRH is an initiative to “provide leadership in creating an enabling regulatory environment for pharmaceutical sector development in Africa.” It is part of the African Union Development Agency (see below) and the Pharmaceutical Manufacturing Plan for Africa (PMPA).

African Union (AU): The AU was launched in 2002, succeeding the Organization of African Unity, which was active from 1963 to 1999. It comprises five regions and has 55 members: Central Africa (9 states), Eastern Africa (14 states), Northern Africa (7 states), Southern Africa (10 states), and Western Africa (15 states).

African Union Commission (AUC): The AUC is the AU’s secretariat and runs the day-to-day activities of the Union. It is based in Addis Ababa, Ethiopia.

African Union Development Agency (AUDA-NEPAD): AUDA-NEPAD’s mandate is to “coordinate and execute regional and continental projects to promote regional integration towards the accelerated realization of Agenda 2063” and “strengthen capacity of AU member states and regional bodies.” (See Part 1 of our series for more about Agenda 2063 and read the AUDA-NEPAD 2021 Annual Report here.)

National Medicines Regulatory Authorities (NMRAs): Each country’s NMRA is responsible for regulatory functions such as marketing authorization, pharmacovigilance, market surveillance quality control, clinical trials oversight, licensing establishments, and laboratory testing.

Regional Economic Communities (RECs): RECs are regional groupings of African countries formed to facilitate regional economic integration and the wider African Economic Community. The AU recognizes eight RECs:

    1. Arab Maghreb Union (UMA)
    2. Common Market for Eastern and Southern Africa (COMESA)
    3. Community of Sahel-Saharan States (CEN-SAD)
    4. East African Community (EAC)
    5. Economic Community of Central African States (ECCAS)
    6. Economic Community of West African States (ECOWAS)
    7. Intergovernmental Authority on Development (IGAD)
    8. Southern African Development Community (SADC)

Regional Centers of Regulatory Excellence (RCORE): AUDA-NEPAD, through AMRH, designated 11 RCOREs to work in eight regulatory functions to build regulatory capacity at NMRAs:

African pharmaceutical regulations: current context

With the AMA going into force barely five months ago, and considering the vastness of the African continent and the diversity of its countries, it should be no surprise that the current context for African pharmaceutical regulations is … one of flux.

Authorities (e.g., the AU and AUDA-NEPAD), through the NMRAs and RCORES, as well as through coordination with the RECs, are working through the many challenges of harmonizing regulations. There are a lot of moving parts that need to coalesce under the AMA umbrella. For example:

Different legal and regulatory frameworks. Many countries and RECs have developed or are developing their own regulatory legislation. But right now, it appears they are not obligated to coordinate, standardize, or harmonize their laws. Therefore, regulations can vary from country to country in a REC, and any country’s laws might also diverge from their REC’s requirements. Regulations also vary from REC to REC, such as the Southern African Development Community (SADC), the East African Community (EAC), and the Economic Community of West African States (ECOWAS).

Furthermore, legal and regulatory frameworks can be unclear and incomplete, and authorities may not make public announcements about their intentions, timelines, and progress. Manufacturers and other supply chain stakeholders may have to submit paperwork to more than one NMRA, which duplicates efforts and wastes resources.

Need for capacity-building. A March 2021 article in the Journal of Pharmaceutical Policy and Practice noted that all but one country had an NMRA or “an administrative unit conducting some or all expected NMRA functions,” but only 7 percent had “moderately developed capacity” and more than 90 percent had “minimal to no capacity.” Complicating matters, some NMRAs operate as independent organizations and some operate within their country’s Ministry of Health.

Reliance on imports and the problem of counterfeits. The United Nations Economic Commission for Africa (UNECA) estimates that Africa imports about 94 percent of its pharmaceutical and medicinal needs at an annual cost of $16 billion. This is a regulatory and logistical challenge. It also means there are plenty of opportunities for illegal activity. We noted in Part 2 that 42 percent of all fake medicines reported to the WHO from 2013 to 2017 came from Africa. The WHO also estimates that one of every 10 medical products in low- and middle-income countries is substandard or fake, while another report says up to 70 percent of pharmaceuticals could be fake in developing regions.

The African Medicines Agency

These disparities, capacity needs, and logistical challenges were among the reasons why the AU wanted to establish a continental regulatory system. And like other regulatory systems, the AMA is designed to protect people, to ensure that all Africans have access to safe, efficacious, and affordable products that meet international standards.

The AMA is based on the AU Model Law on Medical Products Regulation. In broad terms, its goal is harmonization by achieving the following:

      • Registration and marketing of health technologies
      • Granting manufacturing and distribution licenses
      • Conducting quality and safety inspection of health technologies and manufacturing facilities
      • Authorizing clinical trials through an established National Ethics Committee or Institutional Review Board
      • Overseeing appeals procedures through an established Administrative Appeals Committee

International reaction to the AMA has been mostly positive. The International Federation of Pharmaceutical Manufacturers & Associations, for example, said that the “AMA has the unique opportunity to become one of the most efficient and modern regulatory systems in the world.”

And just last month before a two-day EU-AU summit, the EU (including the European Commission, the European Medicines Agency, and member states Belgium, France, and Germany) and the Bill & Melinda Gates Foundation announced they would mobilize more than 100 million euros over the next five years to support the AMA and other pharma regulatory initiatives at regional and national levels.

As of March 3, 2022, 30 African countries had backed the AMA: 19 had signed and ratified the AMA Treaty and deposited their instruments of ratification with the African Union Commission; two had signed and ratified but not deposited; and nine had signed but not ratified. Thirteen countries have said they’d want to be home to the AMA headquarters.

Still, 25 countries have not signed the AMA Treaty, including South Africa, Nigeria, Kenya, and Ethiopia, four of the most important economies on the continent.

Final thoughts

African pharmaceutical regulations and the AMA are evolving. And like all regulations, there will be stops and starts.

The important takeaway is this: The pharma industry must be prepared for the continent-wide AMA regulations and the AU’s vision of a single authority working with a harmonized set of standards. Though there are holdouts, Egypt, Africa’s third most populous country and an important economic power, has ratified and deposited the treaty. This is a significant event in the efforts to get those countries on board with the AMA.

Preparation is the key to compliance and keeping your supply chain running. And we’re experts in making sure you’re prepared for regulations — and every other aspect of supply chain management and optimization — everywhere you do business. Pharmaceutical companies rely on our solutions to comply with strict regulations and to get the most out of their supply chains, from harvesting rich, actionable data in real time to leveraging serialization technology for brand protection and consumer engagement.

Contact us today to speak with one of our experts. In just a few minutes, they can show how our Traceability System will optimize your supply chain today and, importantly, ensure you’re prepared for what’s coming tomorrow.

And if you’re like us and just can’t get enough of regulations and compliance, download our updated “Pharmaceutical Compliance: A Global Overview” white paper. We’ve added more than 25 countries, including REC member states, expanded our “rfxcel Compliance Resources” section, and a lot more. Get it today!

Last but not least, take a look at our other news from the Africa and Middle East region:

Understanding the Supply Chain in Africa: Essential Insights for the Track and Trace Industry

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Welcome to Part 2 of our look at the supply chain in Africa. In Part 1, we did “Africa by the numbers,” getting into the details of the continent’s geography, demographics, economy, and goals of “Agenda 2063.” Today, we’re talking about three challenges and three opportunities. There’s a lot to cover, so let’s get started.

Three challenges for the supply chain in Africa

As we said in Part 1, Africa is big: about 11.7 million square miles (30.3 million square km). The continent has eight primary physical regions — the Sahara, the Sahel, the Ethiopian Highlands, the savanna, the Swahili Coast, the rain forest, the African Great Lakes, and Southern Africa — and traversing these diverse landscapes is not always easy.

Which brings us to the first challenge for the supply chain in Africa: physical and electronic infrastructure. Stated simply, Africa has a long way to go with infrastructure. McKinsey & Company’s “Solving Africa’s infrastructure paradox” (March 2020) provides a good overview of this challenge, the paradox being that there’s a high demand for projects and sufficient capital, but not much action. Specifically,

“… infrastructure investment in Africa has been increasing steadily over the past 15 years, and … international investors have both the appetite and the funds to spend much more across the continent. The challenge, however, is that Africa’s track record in moving projects to financial close is poor: 80 percent of infrastructure projects fail at the feasibility and business-plan stage.”

One eye-opening statistic from the McKinsey article: More than two-thirds of the world’s population that does not have access to electricity lives in sub-Saharan Africa. That’s 600 million people. The challenge is self-evident. Agenda 2063 has ambitious infrastructure components (e.g., rail, air, water) and could very well smash this paradox. But it will take time.

Here are two other key challenges for the supply chain in Africa:

The informal economy. The Center for Global Development reports that Africa’s informal sector is the largest in the world, citing International Labor Organization statistics that it accounts for almost 90 percent of the economy in sub-Saharan Africa and about two-thirds in North Africa. Research from 2019 showed that the informal sector provided 90 percent of all new jobs and 70 percent of all employment across sub-Saharan Africa.

In Africa’s urban areas — the fastest-growing in the world — World Bank data shows that almost 81 percent of jobs are in the informal sector, while the International Labor Organization reported that almost 96 percent of youth ages 15-24 and a little more than 93 percent of women work in the informal economy.

This means that a significant part of the supply chain in Africa is informal, operating through non-official channels and without government oversight, regulation, or taxation. This makes it difficult for businesses to operate in Africa and enables an environment in which other supply chain problems can arise.

Counterfeits. Illegal copying and counterfeiting is widespread in Africa, as it is in other parts of the world with unregulated informal economies and insufficient supply chain protections. Bad actors are only too happy to exploit these conditions.

For example, 42 percent of all fake medicines reported to the World Health Organization from 2013 to 2017 came from Africa. (WHO estimates one of every 10 medical products in low- and middle-income countries is substandard or fake.) Reading between the lines, the proliferation of counterfeit medicines in Africa’s supply chain might be even greater, as weak regulations and lax enforcement often results in under reporting.

To illustrate the problem, last year an Interpol-supported operation in Southern Africa targeting “trafficking of illicit health products and other goods” nabbed 179 suspects and seized products worth approximately $3.5 million. Examples of similar events include the following:

    • 2015-2018: Almost 20 tons of fake medicines seized in Mali
    • 2017: More than 420 tons of illegal pharmaceutical products seized in seven West African countries
    • 2018: 19 tons of counterfeit medicines seized in Ivory Coast, Guinea-Bissau, Liberia, and Sierra Leone
    • 2019: 12 tons of counterfeit pharmaceuticals intercepted in Ghana

But official channels are working to address the problem, including these initiatives:

    • The United Nations Office on Drugs and Crime announced a “holistic strategy” to combat crime and fake drugs in West and Central Africa.
    • The African Union announced that the African Continental Free Trade Area (AfCFTA) Secretariat had signed a letter of intent to work with other partners to combat counterfeit trade.
    • The Lomé Initiative is a binding agreement among the Republic of the Congo, Niger, Senegal, Togo, Uganda, Ghana, and the Gambia to criminalize trafficking falsified medicines.
    • The legal profession is also aware of the problem.

Three opportunities for the supply chain in Africa

The rise of manufacturing. African manufacturing made headlines last month when Afrigen Biologics and Vaccines in Cape Town, South Africa, announced it had successfully copied Moderna’s COVID-19 vaccine with no input from the U.S.-based company. At about the same time, the director of the Africa Centers for Disease Control and Prevention said 10 countries were making vaccines right now or planning to do so, with South Africa, Senegal, Rwanda, Algeria, and Morocco taking leading roles.

Led by organizations such as the African Partnership for Vaccine Manufacturing and the African Vaccine Manufacturing Initiative, a coordinated push is underway to manufacture vaccines in Africa “from scratch” (i.e., not merely “filling and finishing” imported products) and make the continent “vaccine independent.”

And this is emblematic of an African manufacturing renaissance of sorts. In the second quarter of 2021, for example, United Nations’ growth estimates indicated a 17.8 percent expansion of manufacturing output. (Output had dropped by 17.1 percent during the same period in 2020, primarily attributable to the pandemic.) Also in the second quarter of 2021, manufacturing output increased “in many African countries,” including South Africa (39.3 percent), Rwanda (30.2 percent), Senegal (22.6 percent), and Nigeria (4.6 percent).

Other examples are abundant: Carmaker Nissan is opening new facilities, and analysts see Africa emerging as an auto industry hub, including for electric vehicles. Overall, research shows that manufacturing on the continent is growing, or strongly rebounding from the pandemic, especially in key economies in sub-Saharan Africa.

A healthy manufacturing sector means a supply chain with opportunities to modernize alongside production facilities, to adopt international standards (e.g., GS1) and best practices, and to build the infrastructure to secure products from the time they leave the manufacturing floor to the time they reach consumers.

A large — and young — labor force. As we noted in Part 1 of our series, approximately 1.4 billion people live in Africa (about 17 percent of the world population) and the median age is 19.7, making it the youngest continent on the planet. According to the World Bank, half of the population in Sub-Saharan Africa will be under 25 by 2050.

This could poise African countries for an employment/ongoing manufacturing boom similar to what’s happened in Vietnam, Malaysia, Singapore, Mexico, and India. With more jobs in more sectors, including technology, and more products originating on the continent, the supply chain will need to grow and adapt. This will create opportunities for modernization and synchronization with global standards and best practices.

A consumer-centric economy. Africa is an enormous market for domestically produced and imported goods and services. As AfCFTA matures and projects under Agenda 2063 and other initiatives are completed, hundreds of millions of consumers should have more and easier access to these goods and services. They should also be willing to spend more money: As of 2021, the final household consumption expenditure in Africa was a little more than $1.9 trillion; McKinsey says this could reach 2.5 trillion by 2025.

This will have a huge impact on the supply chain in Africa — for manufacturing, logistics, distribution, warehousing, and “the last mile.” The more vigorous Africa’s economy becomes, the more businesses should anticipate development of new industries, dissipation of the informal sector, increased demand for better products, and a growing “consumer class” that will come to expect the supply chain to work everywhere on the continent.

Final thoughts

The supply chain in Africa is a work in progress. Some countries, particularly those in Sub-Saharan Africa, are farther along than others. The reasons for this are diverse, ranging from stronger institutions and more stable infrastructure to fortunate geography that facilitates better access to the flow of global trade.

It’s the wise organization that follows the progress and continuously prepares to do business in Africa. This means being able to work with the supply chain, complying with regulations as they’re rolled out and refined, optimizing your systems — and finding the right solution provider.

Contact us today to speak with one of our digital supply chain experts. In just a few minutes, they’ll demonstrate how our Traceability System will ensure your business can integrate with the supply chain in Africa. After doing that, move on to the last installment of our Africa supply chain series, which highlights the pharmaceutical regulatory environment. In the meantime, think about your supply chain and consider the words of Dr. Akinwumi Ayodeji Adesina, president of the African Development Bank Group:

The future belongs inexorably to the continent of Africa. By 2050, it will have the same population as China and India do now. There will be burgeoning consumer demand from a growing middle class, a population of nearly 2 billion people, of which around 800 million young people will be looking for meaningful and sustainable employment.

If we can harness this potential by aligning supply with demand, markets with customers, and skills with jobs, and keep most of these elements and links largely within Africa, then Africa will become an unstoppable economic force, capable of feeding itself and the rest of the world for good measure. That is the future scope for Africans to shape in their own interests and for their own economic ambitions.

 

Understanding the Africa Supply Chain, Part 1

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Supply chains are about people. Yes, technology — like the digital solutions we provide — and regulations are important, but people are the true drivers, the alpha and omega. People design supply chains and make them run (efficiently and legally, we all hope). As consumers, people are the final destination of every supply chain; if you don’t understand their needs, wants, and habits, and if your products cannot reach them reliably, you’re out of business. The Africa supply chain is no exception.

In Part 1 of our series about the Africa supply chain, we’re looking at facts and figures about the almost 1.4 billion people on the continent. By understanding the people — where they live, their economies and how they work, and ambitious initiatives that will affect their daily lives — we provide the context for a broader discussion and understanding of the Africa supply chain. Let’s get started.

Africa by the numbers

Geography and population

Africa is big. It’s about 11.7 million square miles (30.3 million square km) total, and about 5,000 miles (8,000 km) from north to south and 4,600 miles (7,400 km) from east to west. Only Asia is bigger: 17.2 million square miles (almost 44.6 million square km).

There are 54 countries in Africa. As we said above, the population is approximately 1.4 billion — that’s about 17 percent of the world population. For comparison, there are roughly 4.6 billion people in Asia, 748 million in Europe, 654 million in Latin America and the Caribbean, 370 million in North America, and 42.5 million in Oceana. Africa is also the youngest continent in the world: The median age is 19.7 years. According to the World Bank, half of the population in Sub-Saharan Africa will be under 25 by 2050.

Africa has the highest growth rate in the world, and its population has increased every year since 2000, when it was approximately 811 million. By 2100, the population will approach parity with Asia. Nigeria is the most populous country, with 206 million people, followed by Ethiopia, which has 115 million. Egypt ranks third — 102 million people — and is the most populous country in in North Africa. (Be sure to read our overview of the Egypt pharmaceutical supply chain to learn about what’s happening there.)

The continent is home to between 1,500 and 2,000 languages, about one-third of the world’s languages. At least 75 of those have more than 1 million speakers.

Urbanization

Africa has led the world in urbanization this decade. As of 2021, 609 million people lived in urban areas; this could reach 722 million by 2026. According to the Population Division of the United Nations Department of Economic and Social Affairs, 22 cities in Africa are expected to grow at an average annual rate of more than 5 percent in the first half of the 2020s, and 58 are expected to grow at 4-5 percent. The two fastest-growing cities in the world are Gwagwalada, Nigeria, and Kabinda, Democratic Republic of the Congo. Cities in Angola, Tanzania, and Mozambique are topping current growth statistics, and by 2035, Africa’s fastest-growing cities are forecasted to be Bujumbura, Burundi, and Zinder, Nigeria.

Proliferation of mobile technology

According to the GSMA, an association representing mobile network operators around the world, 495 million people — 46 percent of the population — were subscribed to mobile services in Sub-Saharan Africa at the end of 2020. This was an increase of almost 20 million over 2019. By 2025, adoption of 4G will double to 28 percent (the global average is 57 percent), and 5G will reach 3 percent of total mobile connections.

GSMA reports that 40 percent of the population in Sub-Saharan Africa is under the age of 15. Overall, Africa’s very young population will drive mobile use. Importantly, we can also assume that this demographic will use their mobile devices for everything from banking and shopping to entertainment, creating opportunities for companies to connect to consumers and involve them in the Africa supply chain.

Economy

Pre-pandemic, United Nations statistical data showed that Africa’s economy grew by about 3.4 percent in 2019, “creating one of the longest stretches of uninterrupted positive economic expansion in [the continent’s] history.” This helped fuel a growth of the middle class year over year.

In 2020, Africa experienced a 3.4 percent contraction in gross domestic product (GDP).

According to the United Nations Industrial Development Organization (UNIDO) Industrial Development Report 2022: The Future of Industrialization in a Post-Pandemic World, the pandemic has caused considerable output loss in Africa, as it has in most of world. Here are projected output losses by 2021 for the “economy groups” in Africa:

    • North Africa (four economies): 7.3 percent
    • Less-developed countries (14 economies): 6.8 percent
    • Sub-Saharan Africa (12 economies): 6.4 percent

For perspective, estimated output losses were 7.5 percent in West Asia (5 economies), 4.1 percent in Northern and Western Europe (4 economies), 2.7 percent in North America and Pacific (4 economies), 10.3 percent in less-developed countries in Asia, and 1.4 percent in China.

According to a quick online survey of Africa-based websites, the top job sectors on the continent are agriculture, which accounts for 15 percent of GDP; infrastructure; mining; service; banking and finance; information and communications technology; entrepreneurship; entertainment; and tourism. See here and here for more information.

In 2020, 453 million people were employed in Africa, with the majority in Eastern Africa. The two most populous countries, Nigeria and Ethiopia, had the highest working populations, about 56.6 million and 51.3 million, respectively.

According to the World Bank, regional growth in Africa projections look like this:

    • Sub-Saharan Africa: Growth for 2022 and 2023 will remain just below 4 percent.
    • East and Southern Africa: Growth of 3.4 percent in 2022; excluding Angola and South Africa, 4.3 percent growth is expected in 2022.
    • West and Central Africa: Growth of 5.3 percent in 2022; the West African Economic and Monetary Union (Benin, Burkina Faso, Côte D’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo) is projected to grow at 6.1 percent in 2022. Nigeria is expected to grow by 2.9 percent (African Development Bank Group).

Agenda 2063 and the Africa Supply Chain

Agenda 2063 “is Africa’s blueprint and master plan for transforming Africa into the global powerhouse of the future.” It is being implemented through five 10-year plans, the first of which is scheduled to end next year. Many of its Flagship Projects relate to modernizing and expanding infrastructure; therefore, they are directly related to the Africa supply chain. For example:

African High-Speed Train Network: The network will connect all countries’ capitals and commercial centers, including connecting the 16 landlocked countries to major seaports and neighboring countries.

Single African Air-Transport Market (SAATM): The goal is “the full liberalization of intra-African air transport services in terms of market access [and] traffic rights for scheduled and freight air services by eligible airlines, thereby improving air services connectivity and air carrier efficiencies.”

Continental Commodities Strategy: The goal is to move Africa away from being a raw materials supplier to “developing [its] commodities as a driver for achieving the structural, social, and economic transformation of the continent.” Integrating into regional and global value chains is a key part of the strategy.

The African Continental Free Trade Area (AfCFTA): The goal is to accelerate intra-African trade and boost Africa’s “trading position in the global market by strengthening [its] common voice and policy space in global trade negotiations.” Thirty-six countries had ratified the AfCFTA agreement as of February 5, 2021.

Final thoughts

To understand your supply chain, you have to understand people. We hope this overview of Africa was informative, showing where people live, how they work, the continent-wide trends, and what’s being done to ensure the Africa supply chain better serves every person in all 54 countries.

Everything we’ve talked about today influences the Africa supply chain; however, urbanization could be the most telling and important. As cities continue to grow — remember, urban populations are projected to reach 722 million by 2026 — people will demand more access to goods and services, and the supply chain will have to respond nimbly and efficiently. The proliferation of mobile devices and networks, especially among young people, is another important driver.

rfxcel understands supply chains. The technology, the regulations, and how they affect people. Move on to Part II of our Africa supply chain series, where we discuss recent developments and regulations in specific countries. And be sure to contact us if you have any questions or want a short demonstration of our solutions. We’d love to hear from you.

Last but not least, take a look at our other news from the Africa and Middle East region:

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