Kenya has become the latest victim of an ongoing scale-back of promises made during the Covid-19 pandemic.
That is after Boston-based vaccines manufacturer Moderna announced it has “paused” its plans to build a $200 million (Sh26 billion) mRNA vaccine plant in Kenya, despite the government giving it tax breaks.
Moderna also abandoned, for now, plans to buy 10 acres at Tatu City where the vaccine’s factory would be located.
The plant, set up in the EPZ zones, was to have capacity to produce 500 million doses annually.
Moderna said demand in Africa for Covid-19 vaccines has declined since the pandemic and is insufficient to support the viability of the factory planned in Kenya.
“Moderna has not received any vaccine orders for Africa since 2022 and has faced the cancellation of previous orders, resulting in more than $1 billion in losses and write-downs,” the company said in a statement posted on its website.
It said it would now fulfil demands from Africa for its Covid-19 vaccine through its global manufacturing network.
“Moderna is actively working on the development of public health vaccines, including those for diseases that predominantly affect the African continent, such as HIV and malaria,” the company said.
However, it said such investigational vaccines are at an early development stage. Developing a successful vaccine takes more than 10 years to reach approval and therefore mass production.
“Given this, and in alignment with our strategic planning, Moderna believes it is prudent to pause its efforts to build an mRNA manufacturing facility in Kenya. This approach will allow Moderna to better align its infrastructure investments with the evolving healthcare needs and vaccine demand in Africa,” the company said in a press statement.
“We look forward to a continuing dialogue about future options to support the Kenyan healthcare ecosystem, including as we advance other mRNA vaccines and therapeutics of importance to the African continent through our pipeline.”
Financial Times reported that Moderna had not even paid for its 10 acres at Tatu, where an acre is going for about $1 million.
“Moderna executives have not visited the site since 2022 but met their Kenyan lawyers Anjarwalla & Khanna on a visit to the country last year,” FT reported.
Kenya is not the only loser. Germany’s BioNTech has also scaled back its Rwanda vaccine manufacturing plant.
Moderna’s Tatu City’s plant was to be the company's first mRNA manufacturing facility in Africa.
"The finalisation of our agreement with the Government of the Republic of Kenya is a key pillar of our global public health strategy, where we hope to bring mRNA innovation to the people of Africa in areas of high unmet need, such as acute respiratory infections, as well as persistent infectious diseases like HIV and outbreak threats such as Zika and Ebola," said Stéphane Bancel, chief executive officer of Moderna in March 2023.
"This also demonstrates our confidence in the investment climate in Kenya and the importance of utilising mRNA technology to build resilience in healthcare security in Africa. We are also grateful for the leadership of the US Ambassador Meg Whitman and Samantha Power, in her role as administrator of the United States Agency for International Development for their instrumental support of this project."
Still, Moderna had cautioned these plans were uncertain because its announcement contained forward-looking statements such as "may," "could," "intends," "plans" and "predicts".
“You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, many of which are beyond Moderna's control and which could cause actual results to differ materially from those expressed or implied by these forward-looking statements,” the company’s statement said.
Still, President William Ruto last year said his government was excited and this “milestone” would be a model for Africa.
"We are excited about this milestone that brings to bear our efforts as government to sustain our economic model of facilitating investments that serve not only Kenya but the African continent. My government commits to supporting this investment as a critical signal to the investment community that Kenya is open for business," Ruto said.
Moses Kuria, who was the Investments CS when the deal was signed, said, "This investment creates the momentum to meet the $10 billion annual target under the government's manufacturing by 2030 vision, where we plan to grow the contribution of manufacturing to GDP to 20 per cent by the year 2030 from the current seven per cent."
Moderna did not pull a plug on its other manufacturing plants in the US, Canada, Australia and the UK.