This is a white paper by Agility on the pharmaceutical supply chain in Africa, the world’s fastest-growing consumer market.

1. Africa: pharma’s final frontier
understanding the pharmaceutical supply chain
in the world’s fastest-growing consumer market

2. 2
Table of Contents
Foreword 3
1. Introduction 4
2. Challenges in Africa’s pharmaceutical logistics market 5
People 5
Legislation and regulations 5
Infrastructure 6
Counterfeit medicines 6
3. The current situation 7
4. A new pharmaceutical supply chain model 8
Strategic 8
Tactical 8
Operational 8
5. Conclusion 10
6. Bibliography 11
Agility’s role in the pharmaceutical sector 12

3. Foreword
robust supply chain in order to create sustainable solutions. One of the critical factors to overcome is
visibility – visibility of the physical, financial and information flows. This document provides a brief
overview of the current conditions and of some of the pressing issues. It also presents a way of
addressing these issues in a way that ensures secured medicines are delivered safely to the right
patients at the right time.
Please contact me or a member of our team if you have any questions about Agility and our ability to
meet your supply chain challenges in Africa or elsewhere.
Sincerely,
Leif Krönkvist
Vice President, Global Life Science
Agility Global Integrated Logistics
Africa is on everyone's radar. It is the world's fastest-growing
continent, a place of unparalleled opportunity. Yet about half of child
deaths globally occur in the Sub-Saharan region, and malaria and
other disease remain stubborn threats.
There are a lot of contradictions when it comes to Africa. First of all,
Africa is one continent but not one market, zone or country. The
variety in culture, climate and language across a landmass five times
larger than China demands a regional approach coupled with local
adaptation.
Regardless of the financial or political climate, Africa needs a more
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4. Introduction
chapter one:
The world’s population, 2.5 billion in 1950,
stands at 7 billion today, and is expected to
grow to 9.6 billion by 2050 (United Nations,
2013). Population growth is already straining
food supply at a time when global climate
change poses a threat to output from
traditional areas and means of production.
Africa holds 60% of the world’s undeveloped
arable land, so it is poised to play an essential
role in future global food production, a
development that will drive broader economic
growth across the continent (AGRA, 2013).
Sizeable discoveries of oil and gas will help
Africa become energy sufficient and transform
itself into a global exporter and energy power.
Of Africa’s 54 countries, 16 already export oil.
Together, they hold an estimated 20% of the
world’s total reserves. East Africa’s gas reserves
are among the largest in the world (KPMG,
2013).
Consumer spending in Africa has been rising
sharply and is expected to reach $1.4 trillion
(USD) by 2020 (McKinsey Global Institute,
2010). Twenty-two Sub-Saharan African
countries have already attained “middle
income” status (The World Bank, 2015). Since
2000, Africa’s average annual growth rate has
been higher than the average growth rate of
the world economy (United Nations, 2014).
Despite this strong economic outlook, many
African countries continue to struggle with
development challenges. Sub-Saharan Africa
accounts for 11% of the world’s population,
but it bears 24% percent of the global disease
burden and is home to a mere 1% of global
health spending (World Health Organization,
2006). More than one in four Africans remain
chronically undernourished (Stop Hunger
Now, 2015), and 115 people die every hour
from diseases linked to poor sanitation and
contaminated water (United Nations, 2015).
Governments and international institutions
have made large commitments to reducing
the incidence of communicable diseases.
Those commitments are showing results. For
example, the number of new HIV infections
has decreased by one third since 2000; and
between 2003 and 2012 the number of
patients receiving anti-retroviral therapy
climbed from 100,000 to 7.5 million.
Non-communicable diseases such as cancer,
diabetes and cardiovascular disease have
become more prevalent as the middle class has
expanded. That has fed demand for additional
medicines.
So when it comes to medicines, where are the
hurdles in Africa between production and
patient? This document will highlight some
major opportunities and challenges and show
how the pharmaceutical logistics industry can
respond.
1
(Geoffrey White, 2015)
“For the first time, the world needs Africa more than Africa needs the world.” 1
Geoffrey White, CEO Agility Africa
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5. People
Africa’s changing demographics – longer life
spans, rapid urbanization, a more western
lifestyle and a growing middle class – will all
drive increased demand for pharmaceutical
products.
While the working age population in Sub-
Saharan Africa is estimated to grow 74% by
2030, the practical skills base is low (JICA
Research institute, 2013). Africa has relatively
few health workers, and medical training
opportunities are scarce. A shortage of trained
workers in the healthcare and pharmaceutical
supply chain fields makes it difficult to
maintain supply chain security and integrity
in Africa. The scarcity of qualified employees
is exacerbated by a gender imbalance. Males in
Africa are 1.55 times more likely to receive
secondary education, even though the health
and related industries typically rely more
heavily on female workers (International
Monetary Fund, 2013).
Legislation and regulations
Much of the legislation and regulation
governing pharmaceuticals in Africa still dates
to colonial times and was adapted from rules
that were once in effect in European countries.
Efforts are underway across Africa to update
the regulatory framework to account for
modern medicines, national realities and
today’s patient needs.
The African Union has implemented The
African Medicines Regulatory Harmonization
(AMRH) program to harmonize medicine
regulations across Africa, reduce the time
needed to register essential medicines and
improve the pharma supply chain. In 2012, the
East African Community (EAC) initiated a
pilot project with the target to further align
the South African Development Community
(SADC) and the Economic Community for
West Africa States (ECOWAS), and finally
Central and North Africa (NEPAD, 2015).
Active Regional Economic
Communities (REC) in Africa
Challenges in Africa’s
pharmaceutical logistics market
chapter two:
2
(Adewale Tinubu, 2015) * Common Market for Eastern and Southern Africa
** Economic Community of Central African States
"Never confuse a clear line of sight with a straight line of execution." 2
Adewale Tinubu, CEO Oando
©Agility
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6. ©MarcRoche–Fotolia.com
These fake drugs might not contain any active
ingredients at all; they might contain the
correct ingredients but at the wrong dose; or
they could contain highly toxic ingredients.
While ingesting a fake aspirin without any
active ingredient most likely won’t have any
major negative health effects, counterfeit
medicines used to treat patients with life-
threatening conditions like HIV/AIDS and
malaria have devastating consequences. The
demand for counterfeit drugs is highest in
impoverished, underdeveloped countries
where a majority of the populace cannot
afford or obtain medicines from legal sources.
Weak, inconsistent laws and regulations,
combined with a lack of visibility in the
supply chain, allow illicit distributors to
introduce counterfeit medicines, which often
end up being sold in pharmacies or
administered in hospitals (World Health
Organization, 2010).
Infrastructure
African infrastructure is in woeful shape as the
result of decades of underinvestment and
mismanagement. Half a billion Africans lack
access to electricity. Nigeria, with a population
of 180 million, has the same electricity
capacity as Hungary, which has a population
of 10 million.
Africa’s infrastructure deficit and unreliable
power supplies add significantly to the cost of
doing business. In addition, widespread use of
wood and kerosene adds to CO2 emissions and
the disease burden. Lack of consistent power
supplies undermines the pharmaceutical
supply chain by making proper storage of
vaccines and medicines difficult or impossible
in much of Africa (World Bank, 2011).
Sub-Saharan Africa needs $1.6 billion to $2.8
billion in distribution and retail infrastructure
– new warehouses, trucks, supply chain
management IT systems, etc.
Counterfeit medicines
In certain parts of Africa, counterfeit
medicines account for more than 30% of all
medicines sold (World Health Organization,
2006).
6

7. ©MaksymYemelyanov–Fotolia.com
The current situation
chapter three:
Multinational pharma manufacturers and
their logistics service providers are today very
dependent on local African supply chain
solutions. One of the foremost challenges is
that pharmaceutical products in Africa can
exchange hands between six and fifteen times
en route from manufacturer to hospital, clinic,
pharmacy, doctor or patient. This large
number of intermediaries obviously increases
the price of medicine, and each new link in
the chain adds a level of vulnerability.
In Africa, inefficient markets, regulation and
infrastructure add cost and risk to the supply
chain and hinder the availability of medicines.
One of the main bottlenecks for imports is the
limited access to cold storage at ports and
airports, where irregular and inefficient
customs and clearance can result in goods
being left outside of temperature-controlled
areas for extended periods.
Throughout Africa, there is an immediate need
for pharmaceutical logistics providers to
develop a broader view that reduces costs,
minimizes risks and ensures product integrity
by offering better insight into supply chain
flows.
"Africa is open for business, urbanization is real, scale of opportunity is real in Africa”.3
Bob Diamond, CEO of Atlas Merchant Capital
3
(Bob Diamond, 2015)
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8. ©filipefrazao–Fotolia.com
A new pharmaceutical
supply chain model
chapter four:
The problematic African pharma supply chain
means the current local-market focus needs to
be changed to a broader one in line with the
efforts to streamline African medicine
legislation and regulations. This could be
achieved through a three-level organizational
setup:
Strategic
Defining continent-wide development
Guided by market needs and harmonization
of legislation, the strategic team will drive the
pharmaceutical supply chain development
throughout the continent. The goal will be to
build and maintain a pan-African network of
operational service excellence, which is driven
by market requirements that are streamlined
to meet changing regulations.
Tactical
Monitoring regional regulations
The tactical team, operating on a regional
basis, will be providing support and
governance to both the strategic and
operational teams regarding process
implementation, quality issues,
regulations/legislation and training. This team
will also ensure that all established guidelines
are updated and followed. In order to avoid
interruption of the cold chain during transfers
at ports and airports, this team will be in close
contact with and cooperate with customs
authorities, preferably implementing fast-lane
processes. This regional setup can easily mirror
the structure of regional economic blocks in
Africa such as EAC, SADC and ECOWAS –
groups that already harmonize trade and cross-
border activities and that are working to
harmonize medicine regulations.
Operational
Providing innovative distribution models
On a local level, we suggest development of
distribution infrastructure that will help
mitigate risk and deliver world-class logistics
services for the African market. A pan-African
network of local distribution parks can
provide a route into and out of local markets
for pharmaceutical customers, providing
storage facilities that will guarantee medicine
integrity and security. To be close to markets
4
(Paul Bulcke, 2015)
"Do you want to surf the wave or do you want to be part of making the wave?" 4
Paul Bulcke, CEO Nestlé
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9. and customs authorities, these will be
strategically located close to ports, airports
and urban areas. An e-commerce type of
setup would allow ordering of medicines
via mobile phones and allow for pickup at a
pharmacy located in the distribution park.
African entrepreneurs already have shown
creativity in dealing with last-mile
distribution – from delivery on bicycles to
placing medicines in crates of soft drinks – and
other alternatives can be developed to increase
medicine accessibility and reach more people
in need of treatment.
©Agility
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10. Conclusion
chapter five:
While Africa has a bright future, there is still
much work to do to improve the health of its
rapidly growing population.
Fragmented markets with incomplete or
inefficient regulation, along with weak
infrastructure and a lack of qualified staff,
leave the pharmaceutical supply chain
vulnerable and add significant cost. The high
cost and limited availability of legitimate
medicines mean that a large part of Africa’s
population relies, often unknowingly, on
counterfeits, which can have serious health
consequences.
To break this vicious cycle, pharmaceutical
logistics service providers need to establish a
continental view and support with the efforts
of national government and regional
economic communities to standardize African
pharmaceutical legislation and regulation. One
solution would be to create a strategic network
of local distribution parks, which bring a
world-class environment and create a
geographical footprint across regions and the
continent.
These state-of-the-art facilities would support
the development of the African
pharmaceutical industry and generate jobs for
local communities. This single-source solution
guarantees power, connectivity and security
and will provide a route to market for African
producers in addition to a way into the
growing African market for global suppliers.
©Agility
Distribution park model; guaranteeing power, connectivity and security
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11. Bibliography
Adewale Tinubu, C. O. (2015, January 21). The
African Renaissance Breakfast Debate, WEF
Davos 2015. (C. o. Michael Elliot, Interviewer)
Davos , Switzerland .
AGRA. (2013). Africa agriculture status report.
Geoffrey White, C. A. (2015, January 21).
Africa's time is now. Agility Tradelanes
Magazine, Issue 24, 10.
International Monetary Fund. (2013). Women,
Work, and the Economy: Macroeconomic
Gains from Gender Equity.
JICA Research institute. (2013). Development
Challenges in Africa.
KPMG. (2013). Oil and gas in Africa - Africa's
reserves, potential and prospects.
McKinsey Global Institute. (2010). Lions on the
move: The progress and potential of African
economies.
NEPAD. (2015). African Medicines Regulatory
Harmonization Programme (AMRH).
Retrieved 01 29, 2015
Bob Diamond, C. O. (2015, January 21). The
African Renaissance Breakfast Debate, WEF
Davos 2015. (C. o. Michael Elliot, Interviewer)
Davos , Switzerland .
Paul Bulcke, C. N. (2015, January 21). The
African Renaissance Breakfast Debate, WEF
Davos 2015. (C. o. Michael Elliot, Interviewer)
Stop Hunger Now. (2015). Hunger facts.
Retrieved 01 21, 2015, from
http://www.stophungernow.org/hunger-facts
World Bank. (2011). Africa's Power
Infrastructure.
World Bank. (2015). World Bank Open Data.
Retrieved 01 21, 2015, from
http://data.worldbank.org/
United Nations. (2013). World Population
Prospects - The 2012 Revision.
United Nations. (2014). Economic
development in Africa.
United Nations. (2015, 01 22). Water for life.
Retrieved from
http://www.un.org/waterforlifedecade/africa.s
html
World Health Organization. (2006, 11 14).
Counterfeit medicines. Retrieved 02 02, 2015,
from
http://www.who.int/medicines/services/count
erfeit/impact/ImpactF_S/en/
World Health Organization. (2006). Working
together for health.
World Health Organization. (2010). Report of
the situation of counterfeit medicines based
on data collection tool.
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12. Contact us for more information
Email: Lifescience@agility.com
Website: www.agility.com
Twitter: twitter.com/agility
LinkedIn: linkedin.com/company/agility
YouTube: youtube.com/user/agilitycorp
For a full listing of offices and services offered across Agility’s global network,
please visit our worldwide directory: www.agility.com/directory.
Agility’s role in the
pharmaceutical sector
From its roots in emerging markets, Agility
brings efficiency to supply chains in some of
the globe’s most challenging environments,
offering unmatched personal service, a global
footprint and customized capabilities in
developed countries and emerging economies
alike.
Agility’s solutions meet the unique
requirements of the pharmaceutical industry
by providing a range of services, including;
storage in multiple temperature zones, cold-
chain solutions, reverse logistics, and advanced
tracking and tracing technologies which
ensure total supply chain visibility and
reporting on merchandise flows across all
modes of transport.
Agility leverages these capabilities around the
world to help build access to new markets and
new opportunities for its customers.
In Africa, Agility is building 70 distribution
parks over the next 5 years. This pan-African
network of international-standard logistics
parks will provide a logistics platform into the
fast-growing African market for international
companies and, equally important, a route for
intra-African trade and for export of African-
produced goods.
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