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Guide for new Investors
Ethiopian Food, Beverage & Pharmaceutical Industry Development Institute, Ministry of Industry. June, 2015
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Invest in EthiopiaA Guild for Pharmaceutical
manufacturing Investments
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I. comparative Advantage to invest in Ethiopia
The Federal Democratic Republic of Ethiopia welcomes, promotes and
protects private enterprises.
The comparative advantages to invest in Ethiopian pharmaceutical and
medical supplies sub-sector include: Access to the regional market Strategic location
Stable political climate
Abundant and trainable labor force
Simple and transparent investment approval procedures
Ample opportunities in privatization program
Competitive incentive packages
Availability of suitable industry zone
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I. Comparative advantages and opportunities to invest in Ethiopia/cont’d…
1. Geographic Location Advantage
Ethiopia is geographically well-positioned and accessible to wide & growing markets. Ethiopia also enjoys Duty Free and Quota Free (DFQF) privilege extended by international markets of USA (AGOA), EU (EBA), China, India, Japan & Korea. COMESA Market about 19 countries, 450 M Pop. Middle East and International markets
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I. Comparative advantages and opportunities to invest in Ethiopia
2. Major Important Facts about Ethiopia Political ,Social and Macro-economic Stability Fast Economic Growth Good Governance & Attractive Investment Law Zero Tolerance for Corruption Lowest Crime Rate in Africa Commitment to Support Private Sector Development & FDI Competitive Incentive Packages Simple and Transparence Investment Approval Procedures
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Cont’d…3. Attractive Investment Policies and Incentives
No restrictions on equity ownership in joint venture investment with domestic investors
One incentive policy for domestic & foreign investors
Generous incentive
Income tax exemption (2 to 8 years)
Exemption from the payment of customs duty
Carry forward of losses: half of the tax holiday period
Export Incentive Schemes: Duty Draw-Back scheme, Voucher scheme, Bonded
Manufacturing Warehouse scheme and Export Credit Guarantee scheme
Hand holding Support through the Sector Supporting Gov. Institutes
Guarantee against expropriation or nationalization (Constitution & Investment Law, MIGA & BITs
Full repatriation of profits, dividends, principal and interest payments on external loans
The right to employ expatriate experts and management staff
Bilateral Investment Promotion & Protection Treaties with more than 30 countries
Double taxation avoidance treaties with 18 countries
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Cont’d…Development of Industry Zones A) Industry Zones that are under Development
by Federal Government MoI (Regional B) IZ by Private Developers * Kilinto Industry Zone •Kilinto: 308 hectares under Master plan
and design preparation stage
Kilinto will cater to the pharmaceuticals, agro-processing, food and beverage sectors.
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Incentives for Pharmaceutical Manufacturers
In order to reach the above GTP goals , government has been providing these incentives for PHARMA industries:
Importation of all pharmaceutical input materials on zero tariffs.
30% advance payment for local producers by Pharmaceutical Fund and Supply Agency (PFSA)
PFSA provides closed tender for local PHARMA companies
PFSA takes up products of local pharmaceutical manufacturers by a 25% preference in international tender.
Enabling PHARMA companies to be GMP compliance
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Locally Manufactured Pharma Products
Currently, there are 22 Pharmaceutical and medical supply manufacturers, out of which 9 are human drug manufacturers:
• Product types: Human Drugs Veterinary drugs and vaccines Malaria Rapid Diagnostic Kits Surgical dressing and antiseptic disinfectants Disposible Syring Hospital Beds/Delivery & examination beds Absorbent Cotton Orthopedic Cushions and Pillows Surgical meshes IV bags Diagnostics reagents for laboratories Empty hard gelatin capsules Mouse serum
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List of Locally manufactured Essential MedicinesTablets Capsules Ointments IV fluids/Injectables
Syrup/Suspension
Cimetidin 400 mgNorfloxacine 400 mgCotrimoxazole 480 mgTinidazole 500 mgCiprofloxacine 500/250 mgA.S.A 300mgAl.Hydrox.+Mg.Tristil (120+250mg)Amitriptyline 25mgArthemeter 20mg + Lumefantrine 120mgAscorbic Acid TabletCetrizineChloquine Phosphate 250mgFrusemide 40mgHyoscine BB.IburoprofenMebendazole100mgNiclosamdie 500mgParcetammole 500mg
Metronidazole 250 mgDoxycycline 100 mgAmoxicillin 250/500mgChloramphenicol 250mgCloxacillin 250/500mgDoxycycline 100mgTetracycline 250mgFluxetineIndomethacine
Zinc Oxide 15% 20/1000gmIchthamol 10/20% Benzoic Acid 6% + Salicylic Acid 3%Sulphur 10% Methyl Salicylate 25 %1000gm Dermalar cream 0.025 % 10 gmWhite Fields 1000 gmWhite Fields t 20 gmWhite petrolatum 50/1000 gmFluconazole 100mg
Chloroquine phosphate 50 mg/5 ml (inj)5% dextrose in water, 1000ml0.9 % sodium chloride, 1000ml5% dextrose in saline, 1000mlRinger Lactate, 1000 mlBenzathinePenicillin 2.4miuPeniciline G.Sodium 1miuProcaine Penicillin 4miuDiclofenac Sodium
Dextromethorphan HBr 15mg/5ml,125 Diphenhydramine HCL 12.5 mg/5 ml, 125 mlParacetamol Syrup 120 mg/5 ml, 60 mlPiperazine Citrate 500 mg/5 ml, 30 mlAlbendazole100mg/5mlsusp. 20ml
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Tablets Powders Syrup/SuspensionTheophedrine 120mg/11mgTinidazole 500mgGriseofluvin 125mgLevamizole 2400 mgPhenobarbitone 30/100 mgPredinsolone 5 mgPromethazin 25 mgTheo ephedrine compoundVitamine B-complex TabletChlorpromazine 25/100 mgAzithromycin 250mg Atorvastatin 20mgKetoprofen 50/100mgMeloxicam 7.5/15mgDiclofenac Sodium 50mgZinc Sulphate Monohydrate 20mgAlbendazole 200/400mgMethyldopaAmilodopineFamotidineQiunine SulphateGlibenclamideAlloprinolHyocine
Flavored O.R.S 28.1gmLemlem 20.7 gmMagnesium Sulphate powder 15 gmOral rehydration salt 20.5 gmOmenipazole 20mg
Amoxicillin 125/250mg/5ml - 100ml Dry SuspChloquinePhosphate50mg/5mlsypCo-Trimoxazole susp.Mebendazole100mg/5ml susp.30mlMetronidazole 250mg susp.100mlPiperazine Citrate Elx.700mg/5ml,29mlSalbutamol SyrupMultivitamine Syrup 120mlAmoxicillin + Clav (125 + 31.125)/5ml - 100mlBerantin 125 mlEphadex cough syrup 125 mlMorphine 20 mg/5ml 125 mlParacetamol syrup 60 ml
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Tablets Veterinary Vaccines Veterinary Drugs
Antiseptic & Disinfectants
Enapril Maleate Erythromycine stearateRanithidine HCLSildenafil citrate
AnthraxBovine PasteurellosisOvine PasteurellosisBlack legContagious Bovine Pleuropneumonia (CBPP)Contagious CaprinePleuropneumonia (CCPP)Pest Des Petit Ruminants (PPR)Sheep and goat poxLumpy skin disease (LSD)African horse Sickness (AHS)Foot and Mouth Disease (FMD)Camel PoxRabies VaccineNewcastle HB1,LasotoLive Newcastle Thermo StableInfectious Bursa Disease (Gumboro)Fowl poxFowl Typhoid
AlbendazoleTetramisole HCLOxychlozanide+LevamisoleTriclabendazoleTetracycline+MultivitamineMultivitamin+MineralsTrimetroprim+sulphadiazide
Chloroxylenol 1.2 %Cetrimide 3 % & Chlorohexidine Gluconate 0.3 %Povidone Iodide 7.5/10 %Denatured Alchohol 70 %Hydrogen Peroxide 3%Gluteraldehyde 2 %
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II. Supply/demand gap of Pharmaceuticals
It has to be admitted that the Ethiopian pharmaceutical industry sub - sector is an infant one. Existing industries produce only generic & similar drugs in small quantities.
Demand supply gap :- High rate of increase in the demand of pharmaceuticals Essential drug list: more than 350 drugs that need be available in the
country. Less than 100 of them are produced locally – and with small capacity.
Local producers contribute approximately 15-20 % of the total market share while the rest 80-85% of pharmaceutical & medical supplies products are imported.
80% of drugs, medical supply materials and devices are imported According to a 2008 report from the Ministry of Health, the country’s
demand in pharmaceutical production increases yearly by 25%.
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III. Investment Opportunities
Opportunities for investment in the pharmaceutical and medical supplies sub sector in Ethiopia include: -
A. Production of essential drugs Existing industries produce only generic & similar drugs in small quantities
B. production of raw materials Local pharmaceutical and medical supplies industries depend a lot on imported sources. The industry
imports over 95% of the required raw materials. Availability of raw materials locally is limited to only
about 5% of the total industrial requirements.
Possible potential of raw material production: -
Maize starch Rectified sprite and ethanol
Sodium chloride Refined sugar
Packaging materials Glucose syrup
C. production of medical supplies There is a real gap between the demand and supply of medical supplies such as surgical and latex
gloves. Large amount of these products are imported to the country.
D. Active pharmaceutical ingredients (API) There is no production of API in the country.
E. Production of Herbal Medicines
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Investment Guide
1. Getting Investment License The first step for the investor is to get investment license from the Ethiopia Investment Agency. The
agency also has other several responsibilities to render to investors.
Services at Ethiopian Investment Agency
The Ethiopian Investment Agency (EIA) is the government organ responsible for Promoting,
coordinating and facilitating foreign investment in the country. It is a one stop-shop for all investors
in Ethiopia, and renders the following services:
Provides the necessary information required by investors;
Approves and issues investment licenses to foreign investors;
Provides trade registration services to foreign investors;
Issues operating licenses to approved foreign investments;
Notarizes Memorandum of Association and Articles of Association;
Approves and registers technology transfer agreements;
Registers export-oriented non-equity based foreign enterprise collaborations;
Provides advisory and aftercare services to investors;
Approves expatriate posts and issues work permits to foreign employees;
Facilitate the acquisition of land and utility by foreign investors.
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Investment Guide /cont’d…Requirement for issuance of Investment license
Application form /containing investors full address and fee for service rendered
Total investment capital and Foreign exchange it saves for the country
Details of project implementation schedules indicating major activities with
corresponding period of accomplishment
Project feasibility study
The type of service provided / business objective of the project
2. Land acquisition
Under the new land allocation scheme land acquisition is carried out through
bidding process (auction), direct land offer or through negotiation. Ethiopia
Investment Agency and Ministry of Industry have the mandate to facilitate the
allocation of land for FDI project throughout the country. The responsible
bodies to allocate land are the regional governments.
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Investment Guide /cont’d…Requirements for land acquisition Investment license certificate
Supporting letter from Ministry of Industry
Project feasibility study and its summary
If it’s a business organization, articles of association and memorandum of understanding.
Title deed certificate or proof of ownership of the land if the land is required for expansion of
existing project.
3D design. When land request is accepted Investors have to provide document showing the investment potential to cover 20% of the total
construction cost approved by the bank to be deposited in a designated blocked account.
If the project is financed through bank loan, the investor should at least bring a letter from the
bank approving to finance 20% of the construction cost from one bank only.
Foreign investors should bring document showing their financial status from the respective banks
of origin on which the Ministry of Foreign Affairs and the local bank have approved.
Industrial zone is given much attention by the government and the necessary infrastructure like
roads, electricity, water and telephone are facilitated. Industrial zones in all regions are allocated
at low prices for priority sectors like pharmaceuticals.
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Investment Guide /cont’d…
3. Getting Business license Ethiopia Investment Agency is given the mandate to carry out the issuance of
business license for foreign investors /for local investors issuance is through
Ministry of Trade/, after the investment project reaches the pre-operation stage so
that the commissioning of the production is completed.
Major Requirements needed to acquire business license Lease agreement / Title deed certificate or proof of ownership of the land
A foreign investor is required to invest not less than USD 100,000 in cash or in kind
as an initial investment capital per project and monitored through their
commercial invoice
Bank statement showing all the capital investment and capital breakdown
List of the raw material required for the project implementation
After Ethiopia Investment Agency issues investment permit and business license, it
will notify pertinent government organs to undertake the required follow up.
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Investment Guide /cont’d…
4. Bank Services
All private and government banks are willing to provide loans for pharmaceutical
industries.
4.1 Loan Loan types extended by the banks include long term (20years), medium term (3-
5years) and working capital loans.Banks checklist of requirements for all loans
The major requirement that an investor should fulfill for all loans,
Loan application
License – temporary/permanent work permit for foreign investor
Investment and principal registration certificate
Tax payer identification number (TIN)
Land /proof of ownership/
Pro-forma invoice, utilities and source of equity
Project feasibility study- having market, technical and project financial study
Value added tax registration certificate (VAT)
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Investment Guide /cont’d…Required credit documents list by banks Credit Application,
Renewed trade or investment License,
Principal Registration Certificate,
Tax payer registration certificate,
Profile and financial statement of sisters company/ ies , if applicable
Detailed project feasibility study and /or business plan,
Senior management and board of management profiles, if applicable,
Registered memorandum and articles of Association, if applicable,
Registered minutes of general assembly, if applicable,
Publication of official Gazette/ establishment, if applicable.
Partnership Agreement, if applicable,
Official letter of consent from board of management, if applicable,
Collateral,
Letter of privilege for duty- free status
Certificate for marital status , if applicable
Residence and work permit for foreigners,
Insurance policy, (After the loan is approved)
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Investment Guide /cont’d…
4.2 Opening foreign currency account at the National Bank of Ethiopia
The Authorization to open non- resident account /foreign currency account/
Application letter Duly completing two- application forms
prepared by the bank Foreign investment license (for foreign
investors) Memorandum & article of Association (for
PLC& Joint investment)
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Investment Guide /cont’d…5. Manufacturing license
GMP compliance is a requirement within pharmaceutical manufacture and
testing of these materials for human and animal consumption.
Some of the advantages of GMP certification for Ethiopian pharmaceutical
industries are:-
GMP certified factories guaranty safe and quality products.
Getting GMP certificate is one of the criteria to access to donor funded
market potentials like Global fund, UNICEF etc…
The GMP compliance will help local pharmaceutical companies to export their
products and to be competitive in the international market. Food, Medicine and Health Care Administration and Control Authority
of Ethiopia (FMHACA) is entrusted with the task of administrating and
controlling of the GMP of pharmaceutical sector.
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Investment Guide /cont’d…
Minimum requirements by FMHACA to establish pharmaceutical industry in
Ethiopia include:
1. They should collect establishment and GMP guideline from the authority. Here
the authority provides technical support starting from the design and location
of the premises.
2. Once the manufacturer comply with GMP and start manufacturing the
products should be registered by the authority to be marketed in Ethiopia
(according to the national registration guideline)
3. For those manufacturers engaged in exportation of pharmaceuticals, the
authority will give certificate of pharmaceutical product (CPP) if the
manufacturer requests it and submit all necessary information about the
product to be exported.
4. The authority gives special attention for local manufacturer and it will give
priority for registration of products manufactured locally.
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Addresses of Important Government Bodies1. Food, Beverage & Pharmaceutical Industry Development Institute Tel:- 251- (11) -6- 394146 Fax:- 251- (11) -6- 394209 E-mail:[email protected] P.o.box:-46883 2. Ministry of Industry (MoI) Tel:- 251- (11) -1- 5508775 www.moti.gov.et3. Ministry of Health Te:-251- (11) -1- 5517011 Email:- [email protected] www.moh.gov.et4. Ethiopia Investment Agency (EIA) Tel:- 251- (11) -1- 5510033 Email:- [email protected] www.ethioinvest.org5. Food, Medicine and Health care Administration and Control Authority
(FMHACA) Tel:- 251- (11) -1- 5522750 www.daca.gov.et6. Pharmaceuticals Fund and Supply Agency (PFSA) Tel: -251- (11) -1- 275 Email: [email protected]
