We've got news for you.

Register on BusinessLIVE at no cost to receive newsletters, read exclusive articles & more.
Register now

Last week the World Trade Organisation (WTO) announced an agreement to waive the intellectual property (IP) rights that usually apply in the manufacturing of vaccines, to assist the production of Covid-19 vaccines in developing countries.

The measures were proposed to the WTO by the SA and Indian governments, with the support of other developing countries. The waiver agreement received unanimous support from WTO member countries, indicating the level of global support and potential for partnerships to enable vaccine production in Africa.

The agreement means governments in developing countries will be able to authorise the production of much-needed vaccines or their ingredients, substances and elements, and use patented processes without patent holder permission during the pandemic. According to the World Health Organisation, the continent has fully vaccinated just 15% of its adult population.

The agreement has been lauded for its role in boosting the global pharmaceutical supply chain and healthcare sector manufacturing capacity on the continent. In 2020, the AU African Peer Review Mechanism published a report on Africa’s governance response to Covid-19, which highlighted the continent’s supply-chain challenges and over-reliance on foreign trade. It suggested the continent boost its manufacturing capacity to build a strong continental supply chain that wouldn’t be weakened by global blockages.

Africa needs strong vaccine-manufacturing capacity to tackle Covid-19 and future pandemics. According to the International Finance Corporation (IFC), about 70%-90% of the medicines consumed in Sub-Saharan Africa are imported. The Brooking Institution notes that Africa represents 25% of the global demand for vaccines, but imports 99% of its vaccine doses, with the 1% produced on the continent mostly relegated to the fill-and-finish steps.

Many WTO members have been involved in assisting countries in Africa to upscale their healthcare systems and boost local vaccine production. According to the European Commission, the EU, its member states and the European development finance institutions, together known as Team Europe, are Africa’s top partners and the largest providers of Official Development Assistance in Africa.

One of the aims of Team Europe has been to assist the continent with its pandemic recovery by investing in resilient healthcare systems and local vaccine production. The EU has provided €100m in humanitarian assistance to support the rollout of vaccination campaigns in Africa, as well as to help ensure access to vaccines for vulnerable people, including those in conflict-affected or hard-to-access areas.

At the Forum on China-Africa Co-operation in 2021 it was announced as part of China’s medical and health programme that it would provide 1-billion doses of Covid-19 vaccines to Africa, with 600-million of those doses being a gift and 400-million produced by Chinese companies and via joint ventures with African countries.

According to the US embassy in SA, the US and its partners had donated more than 50-million doses of Covid-19 vaccines to African nations by the end of 2021. A US pharmaceutical firm is also reported to be planning a vaccine production facility in Africa that could produce as many as 500-million doses annually. The US has invested $100bn to strengthen health security in Sub-Saharan Africa over the past 20 years.

The UK government reported on its website that £105m in emergency aid had been pledged to vulnerable countries to tackle Covid-19 by the end of 2021, with a strong focus on Africa. At that time, 30-million vaccines donated by the UK had reached four continents and provided Covid-19 protection in African countries including Angola, the Democratic Republic of the Congo, Ethiopia, Ghana, Kenya, Malawi and Rwanda.

Last year the IFC, French development institution Proparco, German development finance institution DEG and the US International Development Finance Corporation finalised a €600m joint financing package to enable the Aspen Group to produce vaccines in SA. A financial institutions team from Baker McKenzie advised Aspen on that transaction.

The IFC has previously noted the transaction was the largest investment and mobilisation in the healthcare sector the organisation has led to date. The SA-headquartered pharmaceutical company is playing a leading role in producing Covid-19 vaccine treatments and therapies for use across Africa.

Four vaccine initiatives are already under way in SA. The SA government has noted that this WTO agreement will waive IP protections for Covid-19 vaccines to stimulate African industrialisation, boost trade potential and unlock manufacturing capacity and innovation across the content. Trade, industry & competition minister, Ebrahim Patel said there would now also be an increased focus on promoting African vaccine producers to global procurers.

The WTO agreement will promote investment in the African healthcare and life sciences sector and supporting infrastructure, and ultimately improve reciprocal trade between the continent and its major trading partners. Most importantly, the increased manufacturing capacity for pharmaceutical products will drastically improve the ability of African governments to deliver efficient healthcare for their citizens.

• Subban is partner and head of indirect tax at Baker McKenzie Johannesburg.


Would you like to comment on this article?
Register (it's quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.

Commenting is subject to our house rules.