$50 billion a year — that’s the estimated size of the medicines and vaccines market in Africa.
This is a preview of Devex Invested
Sign up to this weekly newsletter inside business, finance, and the SDGs, in your inbox every Tuesday.
The continent imports most of these products, but in the wake of the COVID-19 pandemic, African leaders have prioritized building local markets to prevent the kind of delays and high prices that came with being locked out of critical supply chains.
• The African Union aims to increase the amount of locally produced vaccines from less than 1% to 60% by 2040. But in practice, increasing these local manufacturing efforts is difficult: Regulatory systems are disjointed, competition from China and India is fierce, and manufacturers on the continent still struggle to find investment and sufficient market size.
• A recently agreed pooled procurement mechanism is aiming to address some of those challenges — but details on exactly how it will work are a bit sparse.
• The new mechanism “means the creation of a robust market for manufacturers and ensures the health security of all Africans,” Africa Centres for Disease Control and Prevention Director-General Dr. Jean Kaseya wrote in a press release.
• Devex Senior Reporter Sara Jerving also reports that Africa CDC is working to develop a new pool of finance to assist countries in preparing and responding to disease threats. African leaders also called for the operationalization of a new Africa Epidemics Fund.
Also raising the stakes on local African production, there has been some recent concern that India, one of the largest producers of generic medicines, could agree to stronger intellectual property restrictions in a trade deal, which could limit the supply of medicines, particularly to low-income countries.
Read: The AU plans to pool resources to unify $50 billion pharma market (Pro)
Also read: Leaked trade deal sparks concerns over access to generic medicines (Pro)
Related: Is a new fund really the answer to the next pandemic? (Pro)
+ With a Devex Pro membership, you can access all our expert analyses, insider insights, career resources, exclusive events, and more. If you aren’t a Pro member yet, start your 15-day free trial now.
Banking on guarantees
World Bank President Ajay Banga had previously hinted at wanting to change how the bank handles guarantees — and last week he announced a plan to overhaul that line of business to make things simpler, faster, and easier to access. It’s all part of a play to get the private sector more involved in investing in emerging and frontier markets and came recommended by the bank’s Private Sector Investment Lab, launched by Banga to identify barriers and solutions to boost private investment to tackle climate and development challenges.
The bank does about $7 billion a year in guarantees and plans to boost that to $20 billion annually by 2030. The streamlined platform should be up and running by July 1.
Read: World Bank overhauls guarantee business to woo private investors (Pro)
+ Devex Pro members can get the most out of our World Bank reforms coverage.
The art of the deal
Investment, or the lack of it, is a key theme at the summit of Southeast Asian nations in Melbourne, Australia, this week.
Just 3% of Australia's foreign direct investment goes to the region, compared to 4% to New Zealand alone, 11% to the European Union, and 29% to the United States.
To try and turn that around, the Australian government has adopted the recommendation of a 2023 report and vowed to spend AU$70.2 million ($45.6 million) over four years on “Deal Teams” to work with southeast Asian businesses and governments and Australian investors to facilitate investments.
Australia’s special envoy for Southeast Asia, Nicholas Moore, who wrote the foreword to the report, told reporters Monday that the teams, which are still being hired, all have commercial experience and are tasked with finding and shepherding projects from inception to a point where they’re attracting external funding.
Our Senior Reporter Vince Chadwick is on the ground in Melbourne. If you are there, drop him a line at vince.chadwick@devex.com.
Related reading: Australia overhauls its international aid policy, ups China competition
+ ICYMI, you can now receive globaldev updates directly on your mobile devices by joining our Telegram and WhatsApp channels!
Women’s work
20%
—That’s how much the global gross domestic product could increase if the gender gap in employment and entrepreneurship is closed, according to a new Women, Business and the Law report from the World Bank.
The report finds that the global gender gap is wider than previously thought, and that even where laws to ensure equity are on the books, enforcement falls short.
Unlocking IDA
Last week I interviewed U.S. Rep. French Hill, vice chairman of the House Financial Services Committee — which oversees the U.S. relationship with multilateral organizations like the World Bank. We discussed the upcoming replenishment of the International Development Association, the World Bank’s fund for the world’s poorest countries — and while he told me “it deserves replenishment,” he called that only a “medium-probability event” in an election year. He also laid out a set of requirements Republicans may ask that the World Bank meet to get a significant U.S. contribution to IDA:
• An all-of-the-above energy strategy that focuses on access — and includes nuclear.
• Streamlining of the World Bank’s multitude of trust funds.
• The World Bank demands greater transparency in sovereign lending to the world’s poorest countries (to try and prevent the kinds of predatory pricing, hidden terms, and conflicts of interest that China has employed) and provides them requisite technical assistance.
Read: US Rep. French Hill calls for rethink of World Bank’s climate mission
Nanny state
The Organisation of African, Caribbean and Pacific States, the Brussels-based group that was once the European Union’s “main interlocutor on development cooperation in former colonies” is struggling without much buy-in from top political leaders and mired in other problems including serious financial management concerns, Vince reports. The European Commission will pony up nearly $300,000 to tackle those financial management problems — paying for two consultants to keep an eye on the organization’s historically lackluster bookkeeping.
A 2021 study for the commission, done as OACPS looked to restructure and improve, found that “it is complicated to really grasp what the Secretariat is concretely achieving and what is its impact.” Ouch. Not exactly a glowing evaluation. All this comes as the EU recently agreed to a new 20-year partnership.
Scoop: EU probes finances at African, Caribbean and Pacific group
Background reading: EU sinks €4M into nonexistent renovation for OACPS’ Brussels HQ
What we’re reading
Microfinance pioneer Muhammad Yunus has skirted jail in Bangladesh for now, but he’s by no means out of the woods. [Devex]
The European Investment Bank’s new president, Nadia Calviño, has signaled that the institution may shift its attitude toward nuclear power. [Financial Times]
Union negotiations are underway at the Millennium Challenge Corporation. [Devex]
Vince Chadwick contributed to this edition of Devex Invested.
About the author
Adva Saldinger@AdvaSal
Adva Saldinger is a Senior Reporter at Devex where she covers development finance, as well as U.S. foreign aid policy. Adva explores the role the private sector and private capital play in development and authors the weekly Devex Invested newsletter bringing the latest news on the role of business and finance in addressing global challenges. A journalist with more than 10 years of experience, she has worked at several newspapers in the U.S. and lived in both Ghana and South Africa.
