BMI View: The Mozambican government's efforts to achieve universal health coverage through its 2014-2019 Health Sector Strategic Plan along with the country ' s robust economic performance and growing chronic disease burden will be the pharmaceutical and healthcare sector ' s main driving factor for growth. However, opportunities for multinational drugmakers will continue to be heavily outweighed by the high risks associated with the country such as weak intellectual property protection, poor regulatory environment and political instability.
Headline Expenditure Forecasts
Pharmaceuticals: MZN7.59bn (USD242mn) in 2014 to MZN8.28bn (USD227mn) in 2015; +9.0% in local currency and -6.3% in US dollar terms. Forecast revised downwards from last quarter.
Healthcare: MZN34.99bn (USD1.12bn) in 2014 to MZN38.89bn (USD1.07bn) in 2015; +11.1% in local currency and -4.5% in US dollar terms. Forecast revised upwards from last quarter.
Mozambique has a score of 29.5 out of 100 - just lower than Uganda (30.7) - in our Pharmaceutical Risk/Reward Index (RRI) for Q415, marking no change from last quarter's score. The country is ranked 26th most attractive pharmaceutical market in the Middle East and Africa (MEA) region.
Key Trends And Developments
The Mozambican government is working to ensure that essential drugs reach all healthcare units in the country, according to Health Minister Nazira Abdula. To date, 18,794 kits of essential drugs have been distributed in 2015 for lower level health units, as well as 26,928 kits for community health workers, to cover needs until October 2015. The government has approved a Strategic Plan for Pharmaceutical Logistics in a bid to ensure a regular and continuous supply of all essential drugs and equipment. The plan seeks to guarantee timely delivery, minimise stocks and reduce distribution costs by obtaining accurate data from the points of consumption.
The Japanese government, through the Japan International Cooperation Agency (JICA), will offer USD18.46mn for the construction of the Health Science Institute in Maputo, Mozambique. The project includes the construction of a mid-level educational institution on the outskirts of Maputo, with a maximum capacity of 900 students spread across 15 classes in two shifts, according to a statement by the Japanese Embassy.
The Center for Public Integrity (CIP) and its cooperation partners have criticised Mozambique's state budget for 2015 for giving priority to the defence sector over social areas. In recent years, the budgets have been widely criticised for favouring the defence sector and there were widespread expectations that the latest budget would be different as a new government has come into office. However, Jorge Matine, coordinator of Expense Area and Public Revenue at the CIP, criticised the fact that the budget allocates a considerable portion of the total consideration of MZN226bn (USD6.36bn) to the defence sector at the expense of education and health .
BMI Economic View
Fixed capital investment in Mozambique's burgeoning natural gas sector will be the key contributor to economic growth in the next two years. Though tightening government consumption will lead to a dip in real GDP growth this year, we nevertheless expect robust increases of 6.5% and 7.8% in 2015 and 2016, respectively.
BMI Political View
Mozambique will become increasingly unstable in the coming year following the rejection of the RENAMO proposed autonomous regions bill by the ruling FRELIMO party on April 30 2015. While we do not believe the country will descend into civil war, we cannot rule out a resumption of the insurgency that lasted from 2013-14.