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.

He was contributing to a panel discussion on “Making Biomanufacturing Bankable – What Investors Need from Governments and Manufacturers and vice versa.”

Mr Shaibu emphasised 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 of 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: mobilising 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 borrowers' ability to 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 high-risk mitigants 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 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 in the sector, particularly the risks posed by 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 favourable 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.