Egyptian pharmaceutical companies require $1 billion by year-end 2024 to import necessary raw materials, aiming to increase their supply from three months to six months. The sector has received about $2 billion from foreign sources this year, yet needs $3 billion annually. There are calls for the government to implement a special financing initiative with lower interest rates to support the industry amidst currency challenges.
Egyptian pharmaceutical companies are projected to require $1 billion by the end of the fourth quarter of 2024 for the procurement of vital raw materials and production inputs. Ali Auf, the Head of the Pharmaceutical Division at the Federation of Egyptian Chambers of Commerce, disclosed this information during an interview with Al Arabiya. The capital sought aims to enhance the inventory of pharmaceutical raw materials in Egypt from the existing three-month supply to a sustainable six-month supply. Between the beginning of 2024 and the conclusion of September, Egyptian pharmaceutical factories have reportedly received around $2 billion in foreign currency, according to Auf. However, he emphasized that the sector necessitates approximately $3 billion annually to sufficiently meet its production input demands. In light of increasing governmental initiatives aimed at boosting the reserves of raw materials to six months—an increase from the seven-month buffer that was in place prior to the onset of currency shortages in March—Auf anticipates a rise in the sector’s demand for raw materials. The ongoing foreign currency deficits have severely impacted the availability of medications as well as the stock of raw materials in the country. To address these challenges, Auf has proposed that the Egyptian government establish a specialized financing initiative with interest rates ranging from 5% to 8%. This initiative would assist companies in managing the liquidity difficulties that have been intensified by recent currency devaluations. Currently, pharmaceutical enterprises only have access to financing through an initiative for the industrial sector, which imposes a 15% interest rate—an amount deemed inadequate due to existing price controls within the sector.
The pharmaceutical industry in Egypt has been experiencing significant challenges due to foreign currency shortages, leading to disruptions in the availability of medicines and raw materials. The sector’s dependence on imported raw materials necessitates a stable financial framework to maintain adequate inventories and ensure continuous production. In recent times, the Egyptian government has begun to focus more intently on enhancing reserves of essential materials, reflecting an urgent response to ongoing economic instabilities. The call for specialized financing initiatives is indicative of the industry’s struggles against high interest rates and inflation, aiming to provide viable solutions for sustainability and growth in this critical sector.
In conclusion, the Egyptian pharmaceutical sector is facing urgent financial challenges that necessitate an infusion of $1 billion by the end of Q4 2024 to expand its supply of crucial raw materials. There is a pressing need for the government to facilitate better financing options to ensure the stability of drug supply and production capabilities. With an annual requirement of $3 billion for production materials and the looming threat of shortages exacerbated by foreign currency crises, proactive measures are essential for the health of the pharmaceutical industry in Egypt.
Original Source: www.zawya.com
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