EAC drug makers seek cushion against Asia imports

Pharmaceutical manufacturers in East Africa are seeking special safeguards to cushion them from cheaper imports from rivals in Asia.

The Federation of the East African Pharmaceutical Manufacturers has petitioned East African Community secretary-general Richard Sezibera for incentives that would help grow their business amid rising competition by cheaper imports.

Mr Nazeem Mohamed, chairman of the lobby group, urged for the adoption of a uniform incentive programme that would include the reservation of a 20 per cent quota on all public tenders for products and equipment manufactured in the region.

“There is a need for harmonisation of some of the possible incentive frameworks to promote local pharmaceutical production in the region that include no duties on imports of raw and packing material, pharmaceutical manufacturing related equipment as well as spare parts for this equipment acquired by local manufacturers registered in the EAC,” he said during a meeting with the EAC boss.

“There is also a need for classification or import restrictions for finished pharmaceutical products that can be produced locally, based on regional capacity and quality audits of local manufacturers.”

Rivals from mainly India and China have in recent years captured a huge chunk of the region’s pharmaceutical market. The federation said the implementation of the incentive framework would lead to the growth of local production and create jobs.

“There is also the benefit of reduction of substandard and counterfeit products, creation of high value industry and attraction of investments and financial viability, improved skills and technology transfer, creation of backward and forward linkages and import savings and export earnings among others,” said Mr Mohamed.

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Mr Sezibera said there was a need for well-structured incentive frameworks that would meet the market requirements and allow for growth of enterprises in the bloc.

EAC countries such as Kenya have regularly cushioned their domestic industries from the effects of cheaper imports. In his 201516 Budget, Treasury secretary Henry Rotich issued an extension on several administrative safety nets to cushion industries.

He handed a lifeline to manufacturers of fish nets, gas cylinders, plastic packaging tubes and food processors – long affected by competition from cheaper imports – when he said the government would implement a deliberate strategy to support local companies by increasing the import cost of non-essential goods.

Manufacturers of paper and paper board products, who have been subjected to a stay of application of the Common External Tariff at the rate of 25 per cent, were also beneficiaries of Rotich’s measures.