"Agenda 111 to help revamp medical devices market \u2013 Fitch Solutions"

" \n Agenda 111 to help revamp medical devices market \u2013 Fitch Solutions \n \n\n \n Fitch Solutions, the research arm of Fitch Ratings, has said the completion of the Agenda 111 project by the incumbent government will help revamp growth in the country\u2019s medical device market. \n \n\n \n According to the research agency, the country\u2019s medical device market is expected to grow to GHS 742.6m by 2026. \n \n\n \n The projected growth however, faces some headwinds in the form of elevated inflation and depreciation of the local currency. \n \n\n \n \u201cIf effectively completed, we believe Agenda 111 will significantly benefit the healthcare sector in the country including the medical device market both in the medium-and-long term. However, there are several downside risks the project such as the ongoing depreciation of the Ghanaian cedi against the US dollar, elevated inflation in the country, and rising food and fuel prices,\u201d Fitch Solutions noted. \n \n\n \n On August 17 2021, the government of Ghana announced it had secured a $100m start-up fund through the Ghana Investment Infrastructure Fund (GIIF) for the commencement of its plan to develop specialised and regional hospitals across the country. \n \n\n \n The plan, named Agenda 111 envisioned by President Nana Addo Akufo-Addo, aims to ensure access to quality healthcare services throughout Ghana. \n \n\n \n The Agenda 111 includes the construction of 101 hospitals in districts without health facilities. \n \n\n \n Additionally, a hospital is set to be built in each of Ghana\u2019s six newly created regions and two specialist hospitals are planned to be built in the middle and northern belts of the country. \n \n\n \n Each hospital unit will have facilities such as outpatient and inpatient services, including elective surgery, ophthalmology, dental, physiotherapy and imaging services. \n \n\n \n Following criticism that the project was overly ambitious, in March 2022, President Akufo-Addo stated that 87 hospitals are currently under construction and he reassured Ghanaians that all the hospitals under the Agenda 111 will be completed and commissioned before the end of his tenure in office, which is in January 2025. \n \n\n \n According to Ghana\u2019s Ministry of Health, it is estimated that each hospital under the Agenda will cost around $17mn for construction and medical equipment. \n \n\n \n Read below details of Fitch Solutions assessment of Ghana\u2019s medical device market \n \n\n \n New Health Infrastructure Project Bodes Well For Ghana\u2019s Medical Device Market But Inflation Headwinds Persist \n \n\n \n Key View \n \n\n \n Ghana\u2019s medical devices market will record a consistent recovery from 2022 onwards. A weakening of Ghana\u2019s cedi will put pressures on medical device imports and consumption. Despite these headwinds, increasing public expenditure, particularly investments in hospital infrastructure projects, will revamp growth in the medical device market in the medium term. \n \n\n \n Ghana\u2019s medical devices market will record consistent recovery from 2022 onwards. We have maintained our forecast CAGR and expect Ghana\u2019s medical device market to register a 2021-2026 CAGR of 12.2% in local currency terms and 9.2% in US dollar terms, which will take expenditure to GHS742.6mn (USD110.7mn) by 2026. Growth in the market will be supported by an economic rebound from Covid-induced slowdown in 2020. \n \n\n \n Increasing public health expenditure, particularly investments in hospital infrastructure projects, will further accelerate growth in the medical device market. Over our forecast period, orthopaedic and prosthetics followed by patient aids will be the fastest-growing markets, posting double-digit growth. \n \n\n \n The downside risks to our growth forecasts include current rising inflationary pressures fueling elevated commodity prices and weakening of Ghana\u2019s cedi. \n \n\n \n Ghana\u2019s Medical Device Market To Maintain Strong Growth \n \n\n \n Ghana - Medical Devices Market, GHSmn (2016-2026) \n \n\n \n \n \n\n \n e\/f = Fitch Solutions estimate\/forecast. Source: National Statistics, Fitch Solutions \n \n\n \n A weakening of Ghana\u2019s cedi will put pressures on medical device imports and consumption. Ghana\u2019s medical device market remains heavily reliant on imports, with domestic production only limited and confined to low-tech products. As of 2019, the country imported 86.6% of its total medical devices, with more than 60% of these imports coming from Burkina Faso, Italy and Niger. \n \n\n \n Since the beginning of 2022, the cedi has lost roughly 20% in value against the US dollar. We believe that Ghana\u2019s currency weakness will create headwinds for medical device imports, causing the market to underperform in the short term and most likely in the medium term if the currency depreciation continues. \n \n\n \n Following Russia\u2019s invasion of Ukraine, consumer price inflation has been rising since early 2022, reaching 23.6% y-o-y in April, which is the highest rate since January 2004. Inflationary pressures are mostly driven by elevated transport and food prices, which increased by 33.5% and 26.6% y-o-y respectively in April, squeezing the purchasing power of households. \n \n\n \n We believe that consumer price fluctuations will also affect Ghana\u2019s medical devices private consumption, given that private health expenditure accounts for close to 49% of total health expenditure in the country. \n \n\n \n Downward pressures on private consumption will be exacerbated by a 1.5% tax increase on electronic payments that was recently implemented by Ghanaian government as part of its fiscal consolidation measures. \n \n\n \n 2015 2016 2017 2018 2019 CONSUMABLES 6,258 8,057 7,246 7,911 7,367 BANDAGES & DRESSINGS 1,929 1,593 1,876 2,105 1,464 SUTURING MATERIALS 94 369 348 482 134 SYRINGES, NEEDLES & CATHETERS 2,987 5,017 4,234 4,044 4,532 OTHER CONSUMABLES 1,248 1,078 788 1,280 1,237 DIAGNOSTIC IMAGING 7,583 28,173 25,536 10,955 10,527 ELECTRODIAGNOSTIC APPARATUS 2,591 15,766 8,608 6,090 4,131 RADIATION APPARATUS 3,365 7,146 14,130 2,372 2,231 IMAGING PARTS & ACCESSORIES 1,627 5,261 2,798 2,493 4,165 DENTAL PRODUCTS 1,260 2,203 554 1,364 812 CAPITAL EQUIPMENT 1,097 1,842 421 543 571 INSTRUMENTS & SUPPLIES 163 361 133 821 241 ORTHOPAEDICS & PROSTHETICS 135 289 282 576 243 PATIENT AIDS 1,871 3,089 2,054 1,875 1,394 PORTABLE AIDS 58 218 483 205 66 THERAPEUTIC APPLIANCES 1,813 2,871 1,571 1,670 1,328 OTHER MEDICAL DEVICES 21,058 48,763 24,271 32,461 32,940 TOTAL 38,165 90,574 59,943 55,142 53,283 SOURCE: ITC, FITCH SOLUTIONS \n \n\n \n \n "

"Agenda 111 to help revamp medical devices market \u2013 Fitch Solutions"

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