Commercial
banks are increasingly rethinking how to finance Africa’s emerging
pharmaceutical industry, with Stanbic Bank Ghana positioning itself as a key
player in structuring flexible funding models that combine debt, equity and
development finance partnerships.
Speaking
at the West Africa Biomanufacturing and Market Access Forum, Hakeem Shaibu,
Senior Vice President for Telecoms, Media & Technology and Diversified
Industries at Stanbic Bank, outlined how the bank is adapting its financing
approach to support the capital-intensive and high-risk nature of
biomanufacturing.
Contributing
to a panel discussion on “Making Biomanufacturing Bankable – What Investors
Need from Governments and Manufacturers and vice versa,” Mr. Shaibu emphasized
that Stanbic Bank leverages a wide range of funding solutions, including access
to debt capital markets and equity investors, to structure deals that align
with the long-term nature of pharmaceutical investments.
He
pointed to partnerships with development finance institutions such as the
International Finance Corporation (IFC) and the Development Bank Ghana (DBG) as
critical in lowering risk premiums and providing patient capital. “The nature
of this business requires patient capital. You cannot finance it with
short-term funds that put pressure on operations,” he said.
He
further explained that commercial banks operate within a delicate balance, that
is, mobilizing deposits at a cost and deploying them in ways that guarantee
returns while managing risk exposure.
He noted
that a key consideration for lenders remains revenue certainty. Banks, he said,
place significant emphasis on how borrowers can reliably generate income to
meet repayment obligations. “When we give you a loan, the fundamental question
is how secure we are in terms of collection,” he stressed.
To
navigate these constraints, he noted that Stanbic Bank has increasingly
supported pharmaceutical companies across Africa, including in Ghana, by going
beyond traditional lending. Mr. Shaibu indicated that while the bank has an
appetite for greenfield investments, it typically requires strong risk
mitigates such as guarantees and partnerships to back such projects.
One of
the most critical tools in this regard is technology transfer partnerships.
According to him, these arrangements do not only improve operational efficiency
and reduce production losses but also reassure financiers that manufacturing
processes are proven and reliable. This, he said, gives banks greater
confidence to commit capital, particularly in markets where biomanufacturing
capacity is still developing.
“Where
you have established global partners, their guarantees can effectively serve as
credible collateral,” he explained.
Mr.
Shaibu also highlighted structural challenges within the sector, particularly
the risks associated with limited product lines. He cautioned that companies
focused on a single product, such as vaccines, often depend heavily on
government as the primary buyer, creating cyclical demand patterns that raise
lending risk.
“If your
business model relies on one off-taker, it affects how we price that risk,” he
noted, adding that diversified production portfolios tend to attract more
favorable financing terms due to their recurring revenue potential.
Beyond
internal risk assessments, he called on governments to play a more active role
in de-risking the sector. Measures such as advance market commitments and
clearer procurement frameworks, he said, could help create predictable demand
and improve investor confidence. “When we are modelling these transactions, we
need visibility on where the income will come from,” he said.
Mr.
Shaibu noted that lending rates have begun to ease, creating a more favourable
environment for long-term investments. However, he maintained that sustained
collaboration between banks, governments and industry players will be essential
to fully unlock the sector’s potential.
Hakeem
Shaibu,
Senior
Vice President for Telecoms,
Media
& Technology and Diversified Industries, Corporate and Investment Banking,
Stanbic
Bank Ghana LTD
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