April 04, 2025
Ethiopia’s pharmaceutical sector is undergoing remarkable transformation, emerging as an attractive investment destination for global pharmaceutical companies. Recognizing the sector’s strategic importance, the Ethiopian government has taken significant steps to enhance local production, including the establishment of the Kilinto Industrial Park (KIP), a state-of-the-art facility dedicated to pharmaceutical manufacturing.
Recent government initiatives have resulted in substantial growth in local pharmaceutical production. According to the Ministry of Health, Ethiopia’s domestic pharmaceutical production reached $75 million in June 2024, increasing the local market share from 8% to 36%, with an ambitious target of 47% by 2025. Despite this progress, the country continues to rely on imports for 64% of its pharmaceutical needs, with total imports valued at $676.2 million in 2023. India remains Ethiopia’s largest pharmaceutical trade partner, supplying nearly 40% of the imported medicines, amounting to $244.72 million in the same year.
The Ethio-India Trade and Business Forum, held at the Skylight Hotel, served as a platform to explore investment opportunities in Ethiopia’s pharmaceutical sector. The event welcomed a high-level Indian delegation comprising over 80 representatives from 56 pharmaceutical companies, led by the Pharmaceutical Export Promotion Council of India.
In her keynote address, Minister of Health Dr. Mekdes Daba, reaffirmed the government’s commitment to expanding domestic pharmaceutical production. She highlighted Ethiopia’s ongoing efforts to create a conducive investment climate, including incentives for manufacturers and the establishment of the Kilinto Special Industrial Zone. Dr. Mekdes invited Indian pharmaceutical companies to seize the opportunity to invest in Ethiopia, further strengthening the long-standing economic partnership between the two nations.
Shri Anil Kumar Rai, Ambassador of India to Ethiopia, underscored the importance of fostering strong ties between Indian pharmaceutical manufacturers and Ethiopia’s expanding pharmaceutical industry. He emphasized that Ethiopia’s rapidly growing sector presents an excellent opportunity for Indian investors to contribute to enhancing local production and reducing import dependency.
Zeleke Temesgen, Commissioner of the Ethiopian Investment Commission, extended an invitation to Indian pharmaceutical manufacturers, emphasizing that Ethiopia could benefit greatly from India’s extensive experience in the sector. He assured investors that the Ethiopian government is committed to providing robust support for companies seeking to establish operations in the country.
Heran Gerba, Director General of the Ethiopian Food and Drug Authority (EFDA), reiterated the Authority’s dual role in regulating and facilitating sector growth. She emphasized that ensuring the availability of quality medicines is crucial for achieving universal health coverage in Ethiopia.
India’s pharmaceutical industry, valued at $50 billion in FY 2023-24, is globally recognized as the “pharmacy of the world.” With Ethiopia’s pharmaceutical market projected to reach $4 billion by 2030, Indian investors have a unique opportunity to establish local manufacturing facilities at Kilinto Industrial Park or other designated zones. Ethiopia’s strategic geographic position, coupled with Ethiopian Airlines’ extensive connectivity to 64 African cities and Ethiopia’s membership in the African Continental Free Trade Area (AfCFTA), enhances its potential as a gateway to Africa’s 1.4 billion consumers.
The Ethiopian government has introduced favorable investment policies, offering fiscal and non-fiscal incentives such as price protection for local manufacturers, advance payment schemes, and long-term agreements with the Ethiopian Pharmaceutical Supply Agency (EPSA). These measures aim to attract and retain investors, ensuring sustainable sector growth.
In conclusion, Ethiopia’s pharmaceutical sector presents a lucrative opportunity for investors, particularly Indian pharmaceutical firms. By establishing local production facilities, Indian companies can capitalize on Ethiopia’s growing demand, bridge the production gap, and expand their footprint in the African market. This mutually beneficial partnership will not only accelerate Ethiopia’s pharmaceutical industry development but also enhance India’s presence in the African healthcare landscape, reinforcing the strong economic ties between the two nations.