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Friday, July 1, 2022

Africa’s Debt Crisis Exposes Healthcare Budgets to Big Pharma Manipulation

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In July 2021, the African Union’s (AU) special envoy to the African vaccine acquisition task team, Strive Masiyiwa, issued a scathing attack against the world’s wealthy and powerful nations for failing to make available enough COVID-19 vaccines for the African continent.

”Now is the time for Europe to open up its production facilities so that we can buy vaccines. We are not asking for donations,’’ retorted Masiyiwa.

This came at a point where the continent is still struggling to secure the COVID-19 vaccines and has been heavily reliant upon vaccine donations from OECD countries.

Masiyiwa made these damning claims against the COVAX scheme, which has thus far failed to secure production of the promised 750 million doses of vaccines by the agreed December 2021 deadline.

The COVAX programme is the main global initiative seeking to vaccinate people in lower- and middle-income countries against COVID-19. It comprises three (3) partners: the Coalition for Epidemic Preparedness Innovations (CEPI), Gavi, and the World Health Organization (WHO), alongside the key delivery partner, UNICEF.

Currently, more than a year into the COVID-19 pandemic, the African continent has only vaccinated 3% of its 1.2 billion people, compared to Europe (50%), North America (45%), South America (35%), and Asia (33%).

As more powerful nations re-oriented and deployed their financial, scientific, security, and diplomatic muscle to acquire and even hoard the vaccines, many African countries were still grappling with the socio-economic impact of the pandemic restrictions on their already fragile economies and weak healthcare systems.

Unfortunately, Big Pharma prioritising wealthy countries, as well as India’s vaccine export restrictions, have left Africa’s vaccination goals unattainable on the set timelines.

At this rate, it appears that neither the global COVAX’s goal of 20% by 2022, nor the African Union’s (AU) goal of 60% vaccination rate by 2023 will be achieved.

A major reason for the dismal rates in most of Sub-Saharan Africa is the lack of available vaccine supplies ready to be deployed to health centres. Very few African states have been able to secure significant vaccine batches from pharmaceutical firms or from donor countries’ donations through Official Development Assistance (ODA), widely known as aid.

Meanwhile, Africa’s vaccine production capacity makes up for less than 1% of all vaccines administered across the entire continent. This can be attributed tothe neoliberal onslaught on healthcare systems and corporate control over research and design (such as WTO’s TRIPS). Other factors including prohibitive initial capital needed to set up special health facilities and funding for national research arms also hinder vaccine production.

Hence, the continent’s medical factory capacity has remained negligible as there are fewer than 10 African manufacturers which have vaccine production capabilities, and are based in only five (5) countries: Egypt, Morocco, Senegal, South Africa and Tunisia.

The African continent has only vaccinated 3% of its 1.2 billion people, compared to Europe (50%), North America (45%), South America (35%), and Asia (33%). At this rate, it appears that neither the global COVAX’s goal of 20% by 2022, nor the African Union’s (AU) goal of 60% vaccination rate by 2023 will be achieved.

African healthcare as a human rights issue

The challenge with Africa’s healthcare sector is beyond the COVID-19 vaccine conundrum. When African Union member states met in Abuja, Nigeria in April 2001, they committed to allocating at least 15% of their annual budgets to health.

This is due to the fact that more resources were required to address the pressing health challenges of the day, such as malaria, tuberculosis, cholera, and HIV and AIDS. The more recent reviews show that only two (2) countries, Tanzania and Botswana, have met this goal, with many suffering an even worse reversal of the initial gains.

A critical and increasing focal culprit in Africa’s dismal vaccine drive is the recent debt crisis that has hampered its budgetary planning, geopolitical strength, and logistical abilities. This skewed fiscal arrangement with lending countries and institutions has curtailed investment in vaccine production capacity and left a majority of African states unable to vaccinate about 98% of their populations.

The 2010s saw a number of African countries embrace debts, including Kenya whose debt stands at 80% GDP and Zambia whose debt is currently at USD27 billion, twice the often-stated figure by state officials. The binge was mostly targeted towards infrastructural projects such as roads, bridges, stadiums, rail, and highways. These debts however have proven to have little productive capacity as these were not geared towards people-centric projects.

Given that a fair share of the public borrowing was designated for infrastructure rather than channeled towards healthcare or agriculture, the job creation potential proved to be many times lower–the latter sectors have been known to offer better returns than the debt-fueled construction craze.

Now, the debt addiction has left the continent with a USD760 billion debt burden that has eaten into critical state functions, such as funding healthcare and education in the respective African economies. This is best demonstrated by the fact that most of African countries spend between USD 8 and USD 129 per capita on health, compared to OECD countries that spend above USD 4,000 per capita.

WHO health economist Karin Stenberg’s team recently estimated that 70 low-income countries (LICs) and middle-income countries (MICs) which host 95% of the population of the global South, have an annual health financing gap of about USD 370 billion, occasioned by growing debt repayment pressures on the national budget.

For comparison, this is close to 60% of Africa’s debt burden, which stands at USD 760 billion. Half of these LICs and MICs are in Sub-Saharan Africa.

By the middle of the last decade, Africa made up one (1) in every six (6) people in the world, carried 23% of the global disease burden, yet it accounted for just 1% of total global health budgets.

About half of current health spending by Sub-Saharan countries comes from domestic state funds, while more than 37% of it from out-of-pocket payments by individuals. A further 9% is reliant on donor funds. So, Africa is not only out-funded by its richer peers 10:1, but also about a third of the cash is out-of-pocket pay, which impoverishes families and sinks households into debt.

Donor funding channeled to Africa healthcare has stayed somewhat stagnant since 2008, as a result of the global financial crisis, which has in turn stalled medical sectors that were heavily reliant on donor funding. This donor funding often creates a risky dependency which when pulled away leaves the critical sectors badly exposed. Case in point is the HIV/AIDS funding in Kenya which has seen those dependent on antiretroviral drugs (ARVs) struggle to access and procure them.

So far, only two (2) African countries, Botswana and Tanzania, have achieved the 15% health budget target set in 2001, while 11 countries have regressed and initiated further cut back from their initial dismal health budgets.

Enter the Big Pharma                                                                                                                            

Big pharmaceutical corporations had worldwide revenues totaling USD 1.27 trillion in 2020, with the top 10 biggest firms having a market capitalisation of at least USD 30 billion dollars. Their huge budgets have critical influence over national and global health pacts and laws.

Their stranglehold on many facets of the global healthcare infrastructure is near total with many of their CEOs ending up in country-based, regional and even global health bodies.

In Africa, the Big Pharma is aiming to cash in on the healthcare and wellness sector, currently estimated to be worth USD 260 billion in profits by 2030, with a potential to create 16 million jobs. This is according to the Global Business Coalition for Health, United Nations Economic Commission for Africa (UNECA), and the Aliko Dangote Foundation.

Sub-Saharan regimes have made it explicitly clear that they will pursue and engage private firms and Big Pharma in their health services delivery,  in light of scarce funds because debt repayment has eaten into their budgets.

Many African regimes have outsourced most of their scientific and research-related programmes to these Big Pharma and private firms, making state policies tilt in favor of them, at the expense of their citizens’ welfare.

Big Pharma’s aggressive posture is also aiming to expand the small yet growing and lucrative clinical trials and research in Africa, especially for HIV, TB and COVID-19. The continent has so far only accounted for about 2.5% of the global clinical trials sector, according to Mammo Muchie of the Tshwane University of Technology.

The lax regulation, illiteracy, previous history of breach of contract, corruption, and procedural mistakes involved leave the wider society vulnerable to the overreaches of the Big Pharma trials.

Another critical downside to this capitulation is that it has led to proliferation of substandard, unregulated and even counterfeit drugs and healthcare supplies into the continent’s health infrastructure.

Since 2012, the World Counterfeit Organization (WCO) working alongside the Institute of Research against Counterfeit Medicine (IRACM), have intercepted in excess of 750 million illicit drugs and pharmaceutical items in Africa’s key ports.

The Sub-Saharan population’s desire for cheaper drugs and weak border controls as well as political meddling makes it easy for these drug companies to sneak their loot around.

A critical and increasing focal culprit in Africa’s dismal vaccine drive is the recent debt crisis that has hampered its budgetary planning, geopolitical strength, and logistical abilities. This skewed fiscal arrangement with lending countries and institutions has curtailed investment in vaccine production capacity and left a majority of African states unable to vaccinate about 98% of their populations.

Conclusion

Overall, given that the COVID-19 pandemic is here for long, Sub-Saharan states have to overhaul their healthcare sector, get their debt under control, and build greater manufacturing capacity to meet the pharmaceutical needs of their populations. Strong regulations are also needed to check corporate abuse.

Alongside the state’s role, the donor community will need to scale up vaccine donations and supplies as their responsibility to people and countries in the global South.

The journey of fixing African healthcare and economies requires global answers: debt cancellations, ending TRIPS (and corporate control over health intellectual property rights), realising the ODA pledges, setting progressive tax policies, and fixing tax loopholes. These will help to reorient economies to invest in public social services and people-centered development.

This will also have the effect of loosening their susceptibility to Big Pharma politics, funding, and political interference. Meanwhile, social movements and CSOs have to demand for greater accountability from their governments, and assert their rights and sovereignty on the national budgetary priorities.

If quickly and robustly implemented, the above policies and practices will transform the current vulnerabilities, and stop the healthcare crisis from being the next big crisis for the continent in the 2020s, after the debt crisis of the 2010s. #

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