Ethiopia: Potential to capitalise on demand for affordable pharmaceuticals

Opportunities exist to manufacture certain pharmaceutical products in Ethiopia, a market currently dominated by imports, according to a study by Manufacturing Africa.

Ethiopia’s domestic pharmaceutical market could be worth over US$1 billion by 2025. Growth is expected to be driven by a rising middle income base and urbanisation at a rate of 5.4% per year, which leads to greater access to healthcare as cities have better infrastructure and healthcare capacities.

Imports account for 65% to 75% of the Ethiopian pharmaceutical market and are primarily sourced from India (22%), Netherlands (20%) and Belgium (13%). Finished pharmaceutical products make up the bulk of the imports: about 80% of all the pharmaceutical products imported in 2019. The key products imported into Ethiopia include:

  • 60% – anti-infectives
  • 9% – central nervous system medicines
  • 8% – water and acid base electrolytes
  • 5% – endocrine disorder and contraceptives

Some 60% of total pharma spend in Ethiopia is public and social sector related, making the Ethiopian Pharmaceutical Supply Agency (EPSA) the single most powerful buyer in the country. Key products purchased in the public and social sector are antivirals and antibacterials.

Domestic competition is low with only 11 manufacturers, 45% of which are jointly owned by international and local investors. China is an emerging force in the Ethiopian pharma sector, with two joint ventures and one fully-owned company.

The Ethiopian government has put in place several measures to improve the sector. It has developed a 10-year strategy and plan of action for pharmaceutical manufacturing. Kilinto Park is Africa’s first dedicated industrial park covering 279 hectares, with 136 hectares of land dedicated to pharmaceutical manufacturing. The park is located 15km from Addis Ababa’s city centre, 863km from Djibouti port and 10 minute drive from Bole International Airport. Investors are provided with serviced or ready to use land with common infrastructure and utilities to allow for a quick set up.

Which areas offer the best opportunities?

Finished pharmaceutical products (FPPs) comprise both active pharmaceutical ingredients (APIs) and excipients (inactive substances that serve as vehicles or mediums for a drug). APIs + excipients = FPPs.

According to the study, there is a growing domestic need for affordable pharmaceutical products to meet Ethiopia’s disease burden. While the manufacture of APIs is difficult and largely unattractive, the country could look to scale up production of the FPPs as well as introduce manufacturers interested in manufacturing excipients.

Active pharmaceutical ingredients

Description: Active pharmaceutical ingredients (APIs) are drug molecules that exert a biological effect.

Current production status: There are no API manufacturers in Ethiopia. The country solely relies on imports due to the high degree of complexity required.

Product demand: This product is essential for all products and particularly because Africa only has two API manufacturers.

Feasibility: Investors would be difficult to attract due to high investment requirements, lack of technology capabilities and relatively low margins.


Description: Excipients are the substances that determine the solubility, stability and release method of a drug into the human body.

Current production status: The country currently has only one manufacturer which is government owned and operates at a small capacity – it produces starch and starch based products.

Product demand: Excipients ordinarily take up 70% to 90% of a drug’s weight and the market is primarily reliant on imports, indicating an opportunity for local suppliers.

Feasibility: It is a relatively cheap and simple product to produce. Additionally, other sectors would interested in the production of starch, e.g., the chemicals and textiles industries.

Finished pharmaceutical products

Description: Finished pharmaceutical products (FPPs) are the final combination of the products e.g., tablets, capsules, oral liquids, etc.

Current production status: There are 10 local manufacturers which are able to produce FPPs, of which only four are GMP certified, that collectively account for more than 20% of the entire market.

Product demand: The country has over 200 importing companies that account for 50% to 60% of the market, indicating an addressable opportunity for local suppliers.

Feasibility: FPPs have a higher return on investment compared to APIs and consumables, receive government support and the manufacturing capabilities are within the country’s scope.

Ethiopia: A pharmaceutical manufacturing hub for sub-Saharan Africa?

Ethiopia could also seek to export to the larger sub-Saharan market due to its well established air logistics network through its national carrier, Ethiopian Airlines. Finished pharma products are primarily transported by air due to restrictions on temperature controls. Growth is expected in every segment of Africa’s pharma market, including branded, generics, and over-the-counters. Three factors will drive this growth: the rise of major cities, the expansion in healthcare capacity, and the maturing of the business environment.

This article summarises findings from a Manufacturing Africa report. Manufacturing Africa is an FCDO funded programme looking to support investment into the manufacturing sector across Kenya, Ethiopia, Rwanda, Uganda, Nigeria and Senegal. For more information about Manufacturing Africa, investment opportunities, or additional sector deep dive studies please consult the website at