“The trade deficit in the pharmaceutical sector continues to grow, with five times more imported than exported products, so it becomes increasingly important to turn importers into investors,” he stressed, pointing out that for each Rand invested in the industry, R0.35 was added to fiscal revenue.
“If there were to be a mere 10% increase in investment in the manufacturing industry, the positive knock-on effect would impact numerous sectors of the economy, including employment, exports, income tax revenue, wages and Gross Domestic Product (GDP) to mention but a few,” he continued.
“One of the ways in which we could attract and encourage local investment is to design customised incentives, targeting both the public and private sectors. With the value of the private sector standing at R42 billion compared to the public sector’s share of R8 billion, local procurement should be made applicable to both the public and the private sector. If the private sector were to increase its percentage of local procurement, it would create additional jobs within the manufacturing supply chain.”
Proudly SA’s CEO, Eustace Mashimbye agreed on the pivotal role which procurement could play in re-industrialising the country’s economy and boosting employment.
“An investment of R1 million rand in the manufacturing sector translates into the creation of three sustainable jobs and a R1,13 increase in national GDP,” he said.
To further boost the local pharmaceutical industry, Nicolaou urged that new pharmaceutical product registrations be re-prioritised and their approval fast-tracked, this would reward local producers for investing in the economy and could also potentially attract importers into local investment decisions. “This step, together with greater policy cohesion will provide an impetus to the local sector and could well contribute to an increase in exports.”
Other factors he mentioned were a revision of historical tendering agreements, which did not support industrialisation and which, in some cases, had even had the opposite effect. “We have also witnessed the phenomenon of ‘rollercoaster tendering’, which has led to uncertainty and predictability issues in supply security,” he added.
A long-term member of Proudly SA, Aspen is ranked as the number one pharmaceutical company in the South African private sector and is listed on the Johannesburg Stock
Exchange (JSE). Its primary manufacturing site is in Port Elizabeth, offering world-class local production capabilities.