Industrial Productivity, Health Sector Performance and Policy Synergies for Inclusive Growth: A Study in Tanzania and Kenya

The proposed project studies the supply chains of commodities - essential medicines, medical equipment and supplies, and some other health essentials such as disinfectant - from local industries and from imports into the health systems in the two countries. Shortages and unaffordability of these commodities are persistent causes of poor quality health care and exclusion from care in low income Africa. For two selected case study countries, Tanzania and Kenya, both low income but one (Kenya) with more developed manufacturing, we aim to test the hypothesis that there are unexplored synergies between industrial and health policies that could be identified, and that, if addressed, could contribute to higher employment, industrial upgrading and improved health system performance and accessibility in each country. If we are correct, improved industrial production, in terms of higher producitivity, more appropriate and cheaper products, and innovative methods of production, could improve health service performance while raising economic output: in other words, it could contribute to inclusive growth.

The proposed research would bring together two groups of researchers who often work in separate 'boxes, by linking up the concerns of industrial specialists, looking at the scope for industrial innovation to develop new products and processes and raise industrial productivity, and the concerns of health systems specialists with health system strengthening including improving access to supplies. There is patchy evidence that local production of medicines may improve access to essential medicines, and that shorter supply chains and diversification of sources of supply can reduce shortages, but there are also doubts among health specialists about the quality and economic viability of local production of medicines in Africa. There is however renewed interest among African policy makers and international donors in supporting African industrial development, including local production of pharmaceuticals, and this project would contribute new information to assist debate.

This is a research collaboration between two East African research institutes, ACTS in Nairobi, Kenya, and REPOA in Dar es Salaam, Tanzania, and the Open University, UK, and Rand Europe. It brings together expertise in health systems and health markets; health economics; industrial economics; and technology and innovation studies. The research process will involve from the start private, NGO and public sector stakeholders in both health and industrial sectors, and thus aims to bring together two groups of policy makers too often working in isolation from each other, to debate concrete policy options that arise from the research findings. We aim to translate the research into local and international policy impact.

This impact summary is divided into early impacts, that we expect to result from successful completion of the project, and longer term impacts which may result if the central hypothesis of the project is confirmed and produces concrete proposals. It should be read alongside Pathways to Impact.

Early impacts
These benefits arise in part from limited connection at present between health and industrial policymaking and the ideas and knowledge that inform them, in the two countries and internationally. The beneficiaries, with type of benefit, are:
Health procurement agencies, government, NGO and private, in Kenya and Tanzania, who will gain enhanced understanding of local suppliers' production capabilities and scope for upgrading, hence better information for procurement decisions;
Health policymakers, who will gain enhanced understanding of the local and import supply chains into the health system and the conditions under which upgrading can improve inclusion, enlarging their scope for beneficial intervention;
Private businesses, who will gain additional market knowledge and enhanced scope for interaction with industrial and health policymakers, and information about funding and support opportunities, widening their options for business development;
Professional bodies such as manufacturing associations representing private business, who will gain another route into engagement with relevant policy makers;
Industrial development and innovation policymakers, who will gain enhanced understanding of health system needs and scope for collaboration with health policymakers to identify opportunities to support socially beneficial and commercially viable product and process innovations;
Policymakers in other low income countries facing similar conditions, through generation of ideas for improved integration of health and industrial policymaking;
International policymakers (United Nations, multilateral organisations, bilateral donors, public-private partnerships, African organisations such as NEPAD and the African Development Bank): in health, the project will provide additional understanding of industrial capabilities and industrial constraints on health system performance; in industrial and innovation policymaking the project will provide additional understanding of health system opportunities and constraints.

Longer term impacts.
The central hypothesis of the project is that there are unexploited synergies between industrial development and health system strengthening. If this is shown to be correct, and opportunities for mutual benefit are identified and exploited, then the ambition is to benefit:

Health service users, male and female, who currently face severe shortage of essential supplies, gaining improvements in the cost, quality and availability of supplies that lead to improvements in access to effective care;
Health professionals, whose ability to work effectively will be enhanced by improved supplies, resulting in better quality and more inclusive services;
Health and industrial innovation policy makers, whose ability to support industrial improvement and strengthen health systems will results in higher productivity and quality and fewer stock-outs;
Industrial employees through upgrading of productivity and skills and increased employment opportunities in local production of health service supplies;
Inclusive growth beneficiaries, as industrial firms exploit newly identified opportunities in strengthened supply chains, and the workforce benefits from improved health services, enhancing labour productivity;
International donors and policy makers through identification, evaluation and exploitation of new routes by which funding can support private sector activity to strengthen health systems;
Industrial and health policy not only in Tanzania, Kenya but also elsewhere, through demonstration of the benefits of collaboration between the two fields.