The high levels of contamination of local water bodies especially with mercury, cyanide, and other harmful chemicals have rendered water unsuitable for use in the pharmaceutical manufacturing process, which requires the highest standards of purity.
Earlier this month, the Pharmaceutical Society of Ghana (PSGH) warned that it will be obliged to import water to produce medications. The Society’s President, Samuel Kow Donkoh, expressed concern that illegal mining activities could have a severe impact on medicine manufacture in the country.
He stated that if no action is taken to address the situation, they will be forced to import water to support pharmaceutical production.
The society blames this to illegal mining activities known as galamsey. While water is a critical component in drug manufacturing, importing water significantly raises the cost of production for pharmaceutical companies in Ghana.
The cost burden on pharmaceutical companies will likely be passed on to consumers. As production costs rise due to imported water, the price of essential medications could increase, placing additional financial pressure on households and the healthcare system. This could also affect access to affordable healthcare, particularly for low-income communities, potentially leading to public health challenges as people may struggle to afford necessary medicines.
The need to import water, in addition to the existing import of raw materials and chemicals required for drug production, places further strain on Ghana’s foreign exchange reserves.
The additional import costs could widen Ghana’s trade deficit, as the country is already reliant on imports for several critical sectors. This could contribute to further depreciation of the cedi, increasing inflationary pressures in the economy and impacting other industries that rely on imports.
Ghana’s pharmaceutical companies, facing higher production costs due to the need to import water, could lose their competitive edge against international competitors, both in local and regional markets. This reduced competitiveness could lead to a decline in exports, affecting Ghana’s broader industrial output and reducing the contribution of the pharmaceutical sector to the country’s economy.
As pharmaceutical companies struggle to manage rising costs, they may be forced to downsize or limit expansion plans, leading to potential job losses in the sector. This would have a direct impact on employment levels, particularly in urban areas where many pharmaceutical companies are located. Reduced activity in the sector could also lead to lower tax revenues for the government from corporate taxes and employment taxes, further straining public finances.
In an economic perspective, the government’s ambition to promote industrialization, including the development of local pharmaceutical manufacturing under programs like One District, One Factory (1D1F), could be undermined by the need to import basic inputs like water.
The increased cost of doing business in the pharmaceutical sector might further deter both local and foreign investment, slowing down industrial growth and innovation in the sector.
