The Healthcare Sector
From an outside perspective, the respective healthcare industries in Algeria and Morocco present an attractive investment opportunity. As the two largest populations in the Maghreb region, both countries offer large markets with little competition. According to the latest figures of the Observatory of Economic Complexity (2018), Algeria’s pharmaceutical exports totaled just 6.4 million USD while it imported a whopping 1.77 billion USD. Although nowhere near as stark a difference, Morocco’s trade in pharmaceuticals is similarly heavily imbalanced towards imports with the country importing 662 million USD of products and exporting only 110 million USD. However, despite these vast opportunities for large players in the healthcare industry, the two countries offer completely different experiences in terms of breaking into the market.
Despite 4.3 billion USD of public spending per year and serving as a unique example of universal healthcare in North Africa, the Algerian system is regularly described as defunct and distinctly lacking in proper medical equipment. A major underlying issue is the numerous bureaucratic, registration and international certification hurdles outside investors must navigate in order to get a foothold in the country. Nevertheless, despite these difficulties, Algeria is growing in relevance for large international private sector players as the government diversifies its economy, which many believe will lead to the inevitable opening of the country to international markets. Morocco, on the other hand, is often described as a much more open and friendly environment to do business, boasting a growing middle class and lower international certification requirements.
The attractiveness of each country’s respective health care sector has yet to register with governmental officials on either side of the border. Only 1.2 million USD of Morocco’s total pharmaceutical exports made it across the border, accounting for just 0.068 percent of Algeria’s total imports in this commodity. Unfortunately, these paltry figures are of little surprise within the context of Algeria-Moroccan trade relations given they echo the same story of missed opportunities across multiple sectors.
Local Experience and Solutions
Webinar participants came from a variety of businesses across the healthcare sector. From representatives of medical and laboratory equipment manufacturers to pharmaceutical, cosmetic and food supplement producers, the participants represented a wide variety of interests across the entire scope of the industry. Yet, despite their distinct areas of focus, all participants shared frustration at their inability to conduct trade with their counterparts in the neighboring country. However, it was noted that this is certainly not due to a lack of trying. Representatives from businesses on both sides of the border confirmed their willingness to find partners and markets in Algeria and Morocco but testified to their experience of either running into bureaucratic difficulties, facing open discouragement, or in the case of one participant, discounting cross partnership as a viable option.
One of the more structural problems to bilateral trade in this sector is the lack of trust in the capacity and brand of the other country. This has been one of the overarching themes of the entire project to date, with participants across multiple sectors affirming that products from outside the region, such as Europe, are generally more trusted and better received than those originating from the region. The preference for European-made products discourages Algerian or Moroccan businesses from trying to enter the market across the border, since this general attitude among consumers makes it immensely difficult to market products effectively.
Made in Maghreb: To address the lack of confidence in locally made products, businesses in the region need to foster an environment where the local market is more forthcoming towards products emanating from the Maghreb. One possible solution could be joint business ventures with the stages of manufacturing taking place on either side of the border. In light of the COVID-19 pandemic, this idea also offers a means to reduce reliance on large supply chains from places like China.
Knowledge Platform: The German-Algerian Chamber of Commerce and Industry (AHK) has already launched an internet platform for Algerian and Tunisian businesses to share information and best practices, but this should be extended to Morocco. This platform would serve as a viable means for business leaders to establish partnerships with their counterparts and identify means to navigate bureaucratic obstacles on either side of the border.
Joint Risk Management: To date, the COVID-19 pandemic has not ushered a fresh impetus in either capital to cooperate with their respective neighbor in overcoming shared issues; this is despite the fact both countries are two of the worst hit on the African continent. Businesses from multiple industries in both countries have lost markets as a result of the ongoing situation. Nevertheless, the pandemic offers an opportunity for companies to integrate different elements of their crisis management, so they may come out of the other side of future health crises in a healthier and more stable position.
Training and scientific webinars: Given the economic complementarity between the two countries, knowledge and expertise exchanges offer an immediate and practical means for cooperation. In addition, considering the current lack of interaction between the business communities in Algeria and Morocco, developing education services offers a more viable starting point for the potential development of Maghrebi products in the future.
Continue the process: Participants to the webinar attested to the importance of holding future meetings and continuing the current process. The lack of opportunities for Algerian and Moroccan business leaders to meet and discuss ideas only highlights the necessity for EWI to continue to establish channels of communication for future trade relations. Developing more sub-sector specific webinars offers a legitimate means to continue and build upon the achievements of the initiative. Regarding the healthcare sector, this could take the form of a series of webinars concerning the pharmaceutical or medical equipment manufacturing industries