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East Africa Pharmaceuticals and Healthcare Report Q4 2012

100 Pages BMI Research September 26, 2012 SKU: BMI4880561

In BMI’s Q412 Risk/Reward Rating Matrix, the MEA region scores an average of 44.2, down slightlyfrom 44.5 in Q312. The score continues to rank the MEA region as the least attractive of the five regionssurveyed globally from a multinational involvement perspective.

Oman’s RRR score, which provides an indication of the relative attractiveness of the pharmaceuticalmarket, has been unchanged from Q312 to Q412 at 50.2 out of 100. As a result of Jordan’s score drop,Oman shifted up one position from 10th to ninth in the matrix. Oman has limited longer-term commercialpotential, on account of its small population and the fact that the government is responsible for the bulk ofhealthcare costs, which will increase the need for cost containment in the coming years. On a positivenote, the country’s operating risks are relatively low. Globally, Oman is 51st out of 95 markets surveyed.

Regionally, the better-regulated markets of the GCC – the UAE, Saudi Arabia, Kuwait, Bahrain, Omanand Qatar – South Africa and Israel will remain the most rewarding and least risky for drugmakers.However, these markets are rapidly approaching maturity and are expected to grow only in the mid-tohighsingle digits. As pharmaceutical companies look to enter markets with higher potential, they shouldturn their attention first to the Gulf Levant and then North Africa, where population demographics, theregulatory framework and macroeconomic factors will facilitate growth.

Sub-Saharan African countries are the final frontier in terms of investment because the risks in thesecountries are higher and at present the rewards are lower. However, their appeal lies in the long term, andthe companies that establish their brands sooner rather than later will benefit most. Generally speaking,BMI has preferred the Southern African region over East Africa, followed in preference by West andCentral Africa. We believe West and Central Africa has higher rewards and East Africa has fewer risks.

However, Africa is not homogenous and there are exceptions within regions that stand out and deserveparticular mention, such as Ghana, on which we are bullish, and Zimbabwe, on which we are lessconfident. BMI expects the countries that drugmakers choose to enter will continue to be decided alongex-colonial lines, as language and contacts are often barriers to market entry. These barriers can bebroken down by trade envoys, embassies and ambassadors that can facilitate business in SSA, but it is upto multinational drugmakers to contact them and express an interest.

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East Africa Pharmaceuticals and Healthcare Report Q4 2012

BMI Research
September 26, 2012

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Report with 3 quarterly updates

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