Kenya's Sh5.2bn drug plant takes centre stage at Afreximbank's Nigeria investment summit

 

Kenya currently imports most of its medicines, which leaves hospitals exposed when global supply chains are disrupted. [Getty Images]

A planned Sh5.2 billion ($40 million) Kenyan medicine factory in Kisumu County is one of the flagship projects seeking funding at a major African investment conference in Calabar, Nigeria, next month.

The plant, led by Med Aditus Pharmaceuticals, would produce at least two billion tablets and capsules a year to treat non-communicable diseases, long-term conditions such as diabetes, high blood pressure, cancer and asthma that are not passed from person to person.

Kenya currently imports most of its medicines, which leaves hospitals exposed when global supply chains are disrupted. A local factory would cut that dependence and create manufacturing jobs.

The project is one of three large deals on the agenda at the sixth African Sub-Sovereign Governments Network (AfSNET) Investment Conference, organised by Afreximbank, Africa's continental trade bank.

A ‘sub-sovereign’ government is simply a level of government below the national one such as a county in Kenya, a state in Nigeria, a province in South Africa.

These are the authorities closest to where factories, roads and farms actually operate, but they often struggle to borrow money directly because lenders see them as riskier than national governments.

AfSNET exists to close that gap, helping counties and states prepare credible projects and connect them with banks, investors and development partners.

AfSNET has brought together more than 1,400 delegates from 21 African countries across five previous editions, and helped unlock over $3.2 billion in investment opportunities money that was identified and moved toward projects, though not all of it has yet been spent.

In Nigeria, the Cross River State government has hired Afreximbank as its financial adviser for a $1.7 billion (about Sh220 billion) deep seaport at Bakassi.

A deep seaport can handle large ships and heavy cargo, unlike smaller ports, and would strengthen trade links and support factories and warehouses around it.

In South Africa, an $871 million (about Sh113 billion) project called Nyanza Light Metals is developing a plant to make titanium dioxide pigment, a white powder used in paint, plastics, paper and sunscreen, from raw minerals.

That is an example of "beneficiation": processing a country's raw materials at home instead of exporting them unprocessed and buying back the finished product at a higher price.

The African Continental Free Trade Area is the continent-wide agreement to lower trade barriers between African countries, so goods and services move more freely across borders.

The idea is that African countries trade more with each other rather than mainly with Europe, Asia and the Americas. Afreximbank sees sub-sovereign governments as essential to making AfCFTA real, because trade deals only translate into jobs and factories when counties, states and provinces act on them.

The three-day event, running Nov. 12–14 at the Calabar International Convention Centre, is themed "The role of Sub-Sovereigns in catalysing development through trade and investment".

It will feature training on how to attract investment, workshops on preparing projects that banks will actually fund, pitches from governments to investors, and "deal rooms" , structured meetings where officials sit down directly with financiers. Sessions will also cover tourism, the creative economy, and roads, ports and power lines that enable trade.

"Sub-sovereign governments are central to Africa's economic transformation because they are where much of the continent's production, infrastructure development and investment ultimately take place," said Kanayo Awani, Afreximbank's Executive Vice President for Intra-African Trade in a statement ahead of the conference.

"Through AfSNET, we are creating a practical platform through which states, provinces and counties can strengthen project preparation, connect viable opportunities with capital and build the productive capacity needed to expand intra-African trade," she said.

"The sixth AfSNET Investment Conference will therefore place particular emphasis on bankable projects, investment mobilisation and partnerships that can support industrialisation, value addition and stronger regional value chains."

A "bankable" project is one prepared well enough with clear costs, permits, revenue forecasts and risk assessments that a bank or investor will agree to fund it.

Host Governor Bassey Otu of Cross River State said the conference would demonstrate "the important role that sub-sovereign governments can play in driving trade and investment under the AfCFTA".