The Covid-19 Blueprint: Tackling PPE Shortages Provides Lessons for Accelerating Africa’s Industrialisation

Covid-19

The Covid-19 Blueprint: Tackling PPE Shortages Provides Lessons for Accelerating Africa’s Industrialisation

Commentary
Posted on: 16th December 2020
Liya Temeselew Mamo
Associate

Necessity is the mother of invention and, as the speedy development of vaccines has shown, the sense of urgency caused by Covid-19 has created incentives to innovate and collaborate in ways that could have beneficial impact beyond the response to the pandemic itself.

In Africa, nowhere is this clearer than the way in which countries moved to repurpose their manufacturing capacity to meet the urgent need for items such as PPE and sanitisers, which could provide a signpost for governments across Africa looking to drive industrialisation.

At the start of the outbreak, many countries across the continent struggled with an acute shortage of PPE due to global supply disruptions, exacerbated by Africa’s heavy reliance on imports for essential medical equipment. At the same time, lockdowns and more limited purchasing power impacted demand for many traditional manufactured goods.

In response, governments and the private sector pivoted to repurpose manufacturing capabilities to meet national demand for essential medical items and keep the economy and local businesses afloat.

Repurposing initiatives emerged in some of Africa’s largest economies, including Ghana, Ethiopia and Kenya. A six-country study conducted by the Tony Blair Institute for Global Change across West and East Africa found that, by May, more than 70 companies had repurposed their manufacturing facilities to produce Covid-19 supplies,1https://oecd-development-matters.org/2020/05/26/repurposing-africas-manufacturing-a-means-to-address-medical-equipment-shortages-and-spur-industrialisation/  and highlighted common factors in their efforts.

Overall, effective political leadership, agile, targeted policy, and healthy collaboration with the private sector were key success factors in repurposing manufacturing capability, which can serve as a positive example that can be replicated to facilitate the development of other sectors. 

Effective Political Leadership

It’s clear that high-level political leadership, combined with a sense of focus and prioritisation from governments, played a key galvanising role.

Ghana was one of the fastest to facilitate repurposing efforts. Early on, the government of Ghana engaged local garment manufacturers to reorganise and reposition their production lines for PPE manufacturing. President Akufo-Addo has been at the forefront of this campaign, calling on local manufacturers to join national efforts.

In Kenya, President Kenyatta called on businesses to meet local demand and the government also mobilised the private sector to repurpose manufacturing with targeted support to local business associations, including the Kenya Association of Manufacturers and the Kenya Private Sector Alliance.

In Ethiopia, the government established a Manufacturing Task Force to provide targeted support for manufacturers that were willing to repurpose their operations. This assistance included links to suppliers, facilitating procurement of raw materials, technical advice and employee training, among other measures.

Responsive Problem Solving

Another important factor seems to be a purposeful approach on the part of government in removing obstacles to repurposing.

In Ghana the government took early steps to exempt manufacturers with the capacity to produce essential medical supplies such as sanitising products and PPE from lockdown restrictions. Similarly, the government of Kenya adjusted procedures to support local manufacturing and, by June, had issued licenses to produce masks and sanitisers to at least 25 companies.

In Ethiopia, the government supported garment manufacturers looking to repurpose their facilities by issuing temporary licences for the local production of face masks and sanitisers in April.

Tailored Financial Support

Financial support was also an important tool deployed by governments to support repurposing efforts.

Ghana’s government provided favourable loan terms to small and medium enterprises which needed to expand in order to meet the growing demand for Covid-19 essential items. Among them, four existing local garment manufacturers received a $10 million loan through the Ghana Exim Bank to start producing PPE.2Dignity Apparel, Cadling Fashion, Alfie Design and Sleek Garment Export Limited

Ethiopia’s government issued tax incentives to make manufacture of essential equipment more viable.  The 60 per cent excise tax usually levied on technical alcohol was lifted to encourage the availability of raw materials for sanitiser manufacturers. In addition, manufacturers of PPE and sanitisers were given priority access when making foreign exchange requests, a usual challenge for the private sector in Ethiopia, in order to enable them to import raw materials that could not be domestically sourced.

The repurposing efforts have borne fruit. Ghanaian companies produced a combined 280,000 face masks per day for both the local market as well as to export to other West African countries, paving the way for further regional trade. Nigeria and Liberia are among those to have already placed orders.3http://ggea.net/uncategorized/local-companies-make-progress-in-ppe-production-for-covid-19-fight/

In Ethiopia, at least 36 companies have shifted from garment production to making medical supplies. In September, one of them, Guyya Textile Manufacturing stated that once operational it will have the capacity to produce approximately one million surgical masks per day, and will commence exporting once local demand has been satisfied.

Growing domestic demand for supplies has led two multinational firms operating in Kenya (Unilever and Diageo) to pledge to repurpose their supply chains, production and distribution channels to enable local production of hand sanitisers.4https://institute.global/sites/default/files/inline-files/Tony%20Blair%20Institute%2C%20A%20Guide%20to%20Repurposing%20Manufacturing%20to%20Create%20Medical%20Equipment%20in%20Africa.pdf While this pivot may be a temporary measure, it has shed light on the local demand for PPE and led some companies, such as Hela Industries, to consider a long-term strategy for the production of N-95 masks in their Kenya operations.

Signpost to Industrialisation

Covid-19 has created an incentive for the public and private sector to work together to address a gap in local manufacturing of medical supplies, providing a much-need common goal to resolve supply chain and policy bottlenecks.

In doing so, governments have demonstrated that they can act swiftly and decisively, providing many economic benefits in terms of reduced costs, more reliable supply, and opportunities for businesses as a burgeoning local market opens and expands to meet regional demand. This rapid scale up of manufacturing capability in turn creates an opportunity for the medical equipment, pharmaceutical and sanitisation sectors to support African industrialisation and compete in an ever-globalised world.

While much of this adaptation may be temporary, it could signal a shift towards greater self-reliance in pharmaceutical and medical supply production, including associated input industries such as plastics, glass, textiles and rubber, and provide another way to support industrialisation across the continent. This could be critical given how vital industrialisation is to withstanding future shocks, including pandemics.

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