The Blog

The Road From Aid to Trade: Investing in a Healthier Future for Africa

At the EU-Africa business summit I attended last week, a question that I heard again and again is what are the barriers to investing more in sub-Saharan Africa?

At the EU-Africa business summit I attended last week, a question that I heard again and again is what are the barriers to investing more in sub-Saharan Africa?

I had just arrived in Brussels from Addis Ababa where our country manager, Mohammed, had enthusiastically articulated to me his plan for GSK in Ethiopia. As he waved me goodbye at the airport, I could see there was no doubt in his mind that I would convince our company to provide him the investment he needs to realise his long term vision. Actually, his confidence in my persuasion skills was a bit worrying!

Africa has a large and young workforce, it is increasingly stable and it has natural resources. The development of a thriving private sector in Africa is needed to create prosperity, employment, social mobility and opportunities for young people. So where are the multinational companies?

The answers suggested by the heads of state, development experts and business leaders at the meeting included the fragmentation of the 'Africa market' (which is in fact tens of individual countries), the difficulty in trading between countries, weak infrastructure, the absence of skills, ongoing corruption and so on.

To some, this could sound dismal but I left the meeting feeling excited and optimistic. Sure, these are serious challenges but they aren't impossible. I received handfuls of cards from enthusiastic entrepreneurs and small business owners determined to grow and expand. Businesses need to wake up to the opportunity.

Investment in Africa does not offer the promise of quick returns. A dollar invested today probably won't give you two dollars next year. But the long-term horizon is much brighter. There is a narrow window of opportunity to make the migration from 'Africa's dream' into 'Africa's reality'. That opportunity will come to pass soon.

GSK is one of the companies that has woken up. At the meeting in Brussels, our CEO was outlining a series of new investments in sub-Saharan Africa - £130 million in total - targeted at helping to address pressing health needs across the region, building capacity and creating sustainable growth and jobs, with a long-term view on business return.

This isn't GSK parachuting into Africa. We're already there, present in over 50 countries. I lead a number of countries in East Africa including Ethiopia, Tanzania, Uganda and Rwanda where we have a thriving business, built up by offering reasonably priced medicines and vaccines and recycling a fifth of any profits we make in those countries back into training community healthworkers.

With these new investments, we're signalling that we are ready to take the next step, thinking hard about where we want to be in the next few decades, where we can be an active partner to support the transition from aid to full trade in Africa.

This will see us develop our business model in Africa from being a predominantly sales and marketing organisation to one with a strong domestic manufacturing and R&D base. We're also upgrading our supply chain so medicines can be delivered more efficiently and deeper into rural areas.

We're expanding our existing factories in Kenya and Nigeria and we'll also be building five more in countries such as Ethiopia, Rwanda and Ghana. These factories will create jobs plus they'll also feed the local economy around them. More of the medicines Africa needs, whether antibiotics, asthma inhalers or HIV treatments, can be made closer to where they are needed. Yes, the overall operational costs are relatively higher in Africa right now, so the onus is on us to work harder to reach more patients and drive efficiency. This is a challenge we are ready to take on, working closely with our current and future partners in the continent

We'll need skilled engineers to work at our factories, as well as experts in public health, logistics and quality control to support them. These are transferable skills that will be just as valuable to other companies and industries arriving in the region. So the second thing we're doing is creating 25 Chairs at universities across the continent to build these skills and capabilities.

One of our big hopes is that trade will grow from these manufacturing bases and offer the extra impetus needed to drive regulatory harmonisation and trade agreements between countries. A factory in Rwanda, for example, will be more successful and more sustainable if it can provide medicines to its East African neighbours.

I'm even more excited about the steps we're taking to grow and develop the scientific base in Africa. Back in the early 2000s when I wanted to take my medical training further, I went to London. It's only now that I am going back to East Africa. The Open Lab that GSK is creating will help African researchers tap into the world class facilities and resources that GSK has. It will also focus more GSK expertise on deciphering the particular nuances of diseases in Africa so we can do more to prevent and treat them successfully.

I hope it will help to keep more brilliant minds in Africa. And this in turn will encourage more of the most capable young Africans to go into science, technology or engineering careers. This is how Africa begins to reap the fruits of its massive demographic dividend.

Our investment comes at an important time for international development. Attention is now focused on how the private sector can support the global development agenda beyond 2015, when the Millennium Development Goals expire.

I think the most effective and sustainable way is by business doing what it does best - in GSK's case developing innovative medicines and delivering them where needed - and at the same time being more creative about how we use our skills and resources to bring wider social value.

I visited my family in Kenya recently and was telling my father about GSK's plans for East Africa. I told him we'd soon have locally produced GSK products, such as antibiotics, on the shelves of pharmacies in even small villages like where he lives. He told me it would never happen. Now there's motivation to succeed if ever I heard it!