Angola Pharmaceuticals and Healthcare Report Q3 2012

BMI View: Healthcare may not have been a major concern for Angola’s government – which has prioritised economic development over social development during the years since the civil war ended in 2002 – but with a general election scheduled for September 2012 (an exact date had not been set at the time of writing), BMI expects health and education will receive additional investment in 2012 and 2013 to win votes. For international investors, Angola’s pharmaceuticals and healthcare market holds limited appeal, with low spending, an abundance of counterfeit drugs, considerable operational risks due to little intellectual property(IP) protection or regulation and a burden of communicable and non-communicable diseases its key characteristics.

Headline Expenditure Forecasts Pharmaceuticals: AOA26.78bn (US$286mn) in 2011 to AOA30.02bn (US$320mn) in 2012; +12.1% in local currency and +12.0% in US dollar terms.

Healthcare: AOA480.04bn (US$5.12bn) in 2011 to AOA583.07bn (US$6.22bn) in 2012; +21.5% in local currency and +21.3% in US dollar terms.

Medical Devices: AOA19.06bn (US$203mn) in 2011 to AOA22.43mn (US$239mn) in 2012; +17.7% in local currency and +17.6% in US dollar terms. Risk/Reward Rating: Angola scores 33.3 out of 100 in the Q312 Pharmaceutical and Healthcare Risk/Reward Ratings (RRRs) and ranks 27th out of 30 in BMI’s Middle East and Africa (MEA) regional ratings. This is below the regional average of 44.5. Angola has below-average scores in all categories, with the exception of country rewards, for which it has a score of 63 out of 100.

Key Trends And Developments Angola and Vietnam will consider the creation of a bilateral cooperation agreement regarding the production of essential medicines, the purchasing of drugs and training drug production staff, following Vice President Fernando da Peidade’s five-day visit to Vietnam in February.

Esso Exploration Angola and the Exxon Mobile Foundation have provided US$1.5mn in funding for two new maternity hospitals in Cacuaco and Kilamba Kiaxi in Luanda.

In April 2012, Dr Antonia Muangala told state news agency ANGOP that the government plans to open a nuclear medicine centre for the diagnosis and treatment of various diseases.

BMI Economic View: Angola’s economy is booming, with BMI forecasting double-digit GDP growth of 12.8% in 2012 and a similarly high rate of 10.3% in 2013. Oil continues to be the backbone of Angola’s economic success and its guaranteed revenue will help President José Eduardo dos Santos fund pre- and post-election spending. In order to win voters’ favour, we expect increased investment in education and healthcare over the next two years.

BMI Political View: There is likely to be very little change following the general election – only the second since the civil war ended in 2002 – with the governing Movimento Popular de Libertação de Angola (MPLA) certain to achieve a comfortable victory. The transparency of elections remains questionable following the reappointment of Susana Ingles as the head of the National Electoral Commission – the same person who oversaw 2008’s controversial election