Egypt has allocated EGP 10 billion ($201.5 million) to settle its financial obligations to pharmaceutical and medical supply companies, according to an official statement, as part of efforts to stabilize the sector.
Addressing shortages
Minister of Finance Ahmed Kouchouk stated that EGP 4 billion has already been secured, with an additional EGP 3 billion to be provided next week, followed by another EGP 3 billion the week after, as the government strives to maximize the supply of medications within the market.
Prime Minister Mostafa Madbouly emphasized that “the government is exerting every effort to pay all dues owed to pharmaceutical companies and medical supplies providers, and significant progress has been made in this regard, contributing to an increase in the availability of medicines in the market and stabilizing the pharmaceutical market.”
Throughout recent months, the pharmaceutical market in Egypt has been suffering from a severe shortage causing many citizens, especially those with chronic illnesses, to struggle to find the needed medications. Ali Auf, head of the Pharmaceuticals Division at the Federation of Egyptian Chambers of Commerce in August that there were around “800 medications unavailable in the Egyptian market.”
The shortage was mainly attributed to the lack of foreign currency to import medications during the past two years, affecting the production of pharmaceutical manufacturing companies, said the Minister of Health and Population Khaled Abdel Ghaffar during a July meeting with the Prime Minister.
It is noteworthy to mention that the government approved EGP 7 billion in subsidized loans for pharmaceutical companies in August, providing financing at a lower interest rate of 5-7%. The loans aim to streamline medication production and secure essential imports.
Fortunately, in October, the Egyptian Drug Authority (EDA) successfully provided approximately 95% of the previously unavailable medicines in the market. This step, as announced by the authority’s head, Ali Al-Ghamrawy, “brings the country closer to its pre-medicine shortage period.”
Notably, as part of the government efforts to increase production, Al-Ghamrawy emphasized in press statements in October that the number of pharmaceutical factories has also increased by 37%, and production lines by 60%.
Market revenue
The pharmaceutical market in Egypt is generating substantial revenues. Al-Ghamrawy has reported that the total sales of Egypt’s pharmaceutical market from October 2023 to September 2024 reached 3.6 billion units, valued at approximately EGP 277 billion, “positioning it as one of the largest markets in the Middle East and Africa with significant growth rates,” according to Daily News Egypt in November.
Fitch Solutions has recently revised its pharmaceutical sales forecast for Egypt, however, it maintains a cautious outlook for the near to medium term, according to an October article by Fitch Solutions. It is expected that pharmaceutical sales in Egypt will grow from EGP 181 billion in 2023 to EGP 232 billion in 2024, reflecting a 28% year-on-year increase in local currency terms.
By 2028, Fitch Solutions projects that Egypt’s pharmaceutical market will reach EGP 314 billion, with a five-year compound annual growth rate (CAGR) of 13% in local currency.
