EAST AFRICAN DRUGMAKER WARNS OVER KENYAN IMPORT MOVE

The CEO of a drug firm based in Uganda, Kampala Pharmaceutical Industries, has warned that the possible abolition of a 10% regional import tariff could lead to US$25mn in lost government revenues and irreversibly damage the local industry.

The move follows a unilateral decision by Kenya to remove the tariff, which was intended to improve poor consumers' access to medicines. However, it is argued that the tariff has only a negligible effect on retail drug prices. Further, removing the tax would likely strengthen the position of low-cost Indian and Chinese firms on the US$300mn East African market, which already account for 80% of import volumes and receive substantial price incentives.

Previously, boosting the domestic manufacturing sector had been the basis for regional government policy in delivering more affordable healthcare. Kenya's move has also been condemned in Nigeria, Tanzania and Zambia as well as Uganda, where local market observers claim it has already led to price rises on life-saving drugs.