Stanbic Bank Ghana is combining debt, equity and development finance partnerships to support Africa’s pharmaceutical sector, as it seeks to address funding gaps and unlock long-term capital for biomanufacturing.
A Senior Vice President at the bank, Hakeem Shaibu, said the approach was necessary because of the capital-intensive nature of the industry and the need for patient financing structures that reduce risk while ensuring sustainability.
Speaking at the West Africa Biomanufacturing and Market Access Forum, he explained that commercial banks were increasingly rethinking traditional lending models to accommodate the realities of pharmaceutical manufacturing on the continent.
Mr Shaibu said the bank had moved beyond conventional lending by structuring deals that blended access to debt capital markets with equity investments to align with the long-term horizon of pharmaceutical projects.
He said partnerships with development finance institutions, including the International Finance Corporation and Development Bank Ghana, had helped reduce risk exposure and improve access to affordable capital.
“The sector required long-term funding structures, and we structured financing in a way that reduced pressure on businesses while ensuring repayment capacity over time,” he said.
Balancing risk
Mr Shaibu said commercial banks continued to operate within strict parameters, balancing the cost of mobilising deposits with the need to deploy funds in a way that guaranteed returns while managing exposure.
He said revenue certainty remained a key factor in lending decisions, with banks placing emphasis on the ability of borrowers to generate stable and predictable income streams.
“We assessed every transaction based on how secure repayments were likely to be, because that remained central to our lending decisions,” he said.
He said the bank had supported pharmaceutical companies across Africa, including in Ghana, by introducing innovative financing approaches that went beyond standard credit facilities.
While expressing interest in greenfield investments, he said such projects often required strong risk mitigation measures, including guarantees and partnerships, before banks could commit capital.
“We supported new projects where there were credible safeguards, because that gave us the confidence to deploy funds into high-risk environments,” he said.
Role of technology
Mr Shaibu identified technology transfer partnerships as a critical component in strengthening bankability within the sector.
He said such arrangements improved operational efficiency, reduced production losses and assured financiers that manufacturing processes were proven and reliable.
“Partnerships with established global players served as credible backing, and in some cases, their guarantees acted as collateral for financing,” he said.
Structural risks persist
He cautioned that pharmaceutical firms with limited product lines faced higher financing risks, particularly where demand depended heavily on a single buyer.
He said companies focused on products such as vaccines often relied on government procurement, which created cyclical demand patterns and affected revenue stability.
“Businesses that depended on one off-taker posed a higher risk, while diversified portfolios improved their chances of securing favourable financing terms,” he said.
Mr Shaibu called on governments to introduce measures that would help de-risk the sector and attract private capital.
He said policies such as advance market commitments and clear procurement frameworks could provide predictable demand and improve investor confidence.
“We needed clearer visibility on revenue streams when structuring deals, and government support played a key role in that process,” he said.
He added that easing lending rates had created a more favourable environment for long-term investments, but sustained collaboration between banks, governments and industry players remained critical to unlocking the sector’s full potential.
Source:
www.graphic.com.gh
