DRUGMAKERS, ETHIOPIAN GOVERNMENT CONDEMN IMPORT RULES

A meeting between Ethiopian government officials and representatives of the local drug industry has highlighted the local market's problems. Chief among these are discriminatory trade tariffs, which can add a further 65% of cost to imported drug raw materials, while finished products are only subject to a 10% duty.

The government has blamed local healthcare NGOs for the much of the problem, claiming such agencies often sidestep government procurement rules when importing medicinal and pharmaceutical products. Officials and industry sources also accuse local private banks of being too reluctant to lend to local drug firms.

However, the government is hardly an honest broker in the discussions. Ethiopia has spent roughly US$60mn over the past decade on building up the local manufacturing industry, much of which is bankrupt or close to collapse. About 30% of annual government medical procurement is awarded to local companies, with state-owned Epharm accounting for 80% of this total. Nevertheless, the government is currently attempting to auction two bankrupt firms, Biosol and Lifeline.