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Africa’s pharmaceutical industry is facing a severe crisis as the depreciation of local currencies, coupled with geopolitical tensions continues to disrupt trade. Indian pharma exporters have raised alarm over the drastic decline in pharmaceutical exports, which have plummeted by up to 50% in some regions.
An industry expert associated with the development highlighted that the impact is not limited to sales but has also created a significant cash flow crunch in the industry. "This situation is unsustainable for many exporters, especially micro, small, and medium enterprises (MSMEs), which form the backbone of India's pharmaceutical supply to Africa," he stated.
The fall in local currencies across Africa has made pharmaceutical imports more expensive, leading to reduced demand.
A significant decline in local currencies across Africa is currently happening, impacting countries like Nigeria, Ghana, Egypt, Zambia, and others, where currencies like the naira, cedi, and pound have seen substantial depreciation against the US dollar, leading to rising import costs, increased debt burdens, and a decrease in purchasing power for citizens due to inflation; this is often attributed to factors like global economic instability, high debt levels, commodity price fluctuations, and a strong US dollar.
Many African currencies have lost a significant percentage of their value against the US dollar in recent times, with some experiencing declines of over 30%. The weakening currencies directly impact the cost of imported goods, leading to rising inflation and making basic necessities more expensive for citizens. As currencies depreciate, the value of external debt rises, making it more difficult for African nations to service their debt obligations.
Contributing factors include global economic shocks, fluctuations in commodity prices (especially for oil-producing countries), political instability in certain regions, and reliance on foreign currency for imports. Some proposed solutions include promoting intra-African trade to reduce reliance on the US dollar, developing local currency markets, and implementing policies to attract foreign investment.
According to the Union commerce ministry, Africa accounted for 18% of India's USD 19.9 billion pharmaceutical exports in FY23. While some nations, including South Africa, Kenya, and Tanzania, recorded growth in imports, others—such as Nigeria, Ethiopia, and Uganda—saw sharp declines.
To address currency volatility, the Reserve Bank of India (RBI) had last year in May authorized 20 Indian banks to open 92 Special Rupee Vostro Accounts (SRVAs) with partner banks in 22 countries. These measures were aimed to facilitate trade in the Indian rupee and reduce dependence on the US dollar.
Indian pharmaceutical companies have earned a strong reputation in Africa and Latin America for supplying high-quality, affordable medicines. Yet, without immediate policy interventions, the current financial and logistical disruptions threaten to erode these gains. Pharma exporters are urging the Indian government to introduce financial relief measures, stabilize trade mechanisms, and explore alternative shipping routes to support the industry’s recovery.
As global economic pressures persist, exporters and policymakers alike must act swiftly to prevent long-term setbacks to India's pharmaceutical presence in Africa.
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