Pfizer headquarters in New York Photograph:( AFP )
This comes amid a debate over vaccine inequality, which has left poor countries at a significant disadvantage with respect to protecting their citizens against Coronavirus
The move comes amid growing criticism of vaccine inequality that has seen poor countries fall behind richer ones in the race to protect people from the coronavirus.
Under the agreement, Cape Town-based Biovac will complete the last step in the manufacturing process of the Pfizer/BioNTech vaccine, known as "fill and finish", the companies said in a statement.
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The project will take time to get off the ground, however, with the first African-finished Pfizer vaccines not expected before next year.
Once up and running, Biovac is set to churn out more than 100 million doses annually that will be distributed to the 55 countries in the African Union.
"This is a critical step forward in strengthening sustainable access to a vaccine in the fight against this tragic, worldwide pandemic," said Biovac chief executive officer Morena Makhoana.
"Technical transfer, on-site development and equipment installation activities will begin immediately," the statement added.
South African President Cyril Ramaphosa called the partnership "a breakthrough" for African nations.
The reaction from the World Health Organization was more muted.
"We welcome all initiatives to increase COVID-19 vaccine production in the future but immediate action is needed now," a spokesman said.
In low-income countries, "only one percent of people have received at least one dose, compared with more than half of people in high-income countries," he added.
The coronavirus vaccine developed by Germany's BioNTech and its US partner Pfizer, based on experimental mRNA technology, was the first to be approved in the West late last year.
Studies have shown it is highly effective against COVID-19, including against newer variants.
Another plant in South Africa is already handling the fill and finish process for the COVID-19 shot developed by pharmaceutical firm Johnson & Johnson, which uses a traditional viral vector-based method.
Debate over patents
Calls have grown for pharma companies to waive patents on their life-saving jabs to speed up the pace of inoculations globally.
Washington and Paris have backed the suggestion, but the vaccine companies themselves are fiercely opposed.
German Chancellor Angela Merkel has also said that suspending intellectual property rights could stifle innovation and would not resolve the lack of manufacturing capacity in the short term.
She has instead argued for licensing agreements and partnerships between vaccine makers and local firms, the approach taken by BioNTech and Pfizer.
"We aim to enable people on all continents to manufacture and distribute our vaccine while ensuring the quality of the manufacturing process and the doses," said Ugur Sahin, BioNTech's co-founder and CEO.
Pfizer CEO Albert Bourla said weakening intellectual property "will only discourage the type of unprecedented innovation which brought vaccines forward in record time and make it harder for companies to collaborate going forward".
Pfizer/BioNTech said they have so far shipped more than one billion COVID-19 vaccine doses to over 100 countries or territories, including through the Covax vaccine-sharing programme.
The Covax scheme, backed by the WHO and heavily relied on by African countries, has so far delivered far fewer doses than expected, however.
South Africa has the highest number of COVID-19 cases and fatalities in Africa, recording more than 2.3 million infections and over 67,000 deaths.
The country is currently battling a third wave of the pandemic, fuelled by a lack of vaccines, public fatigue with Covid restrictions and the highly contagious Delta variant.
South African President Ramaphosa last month announced a plan to turn his country into an mRNA vaccine hub, saying Africans "cannot continue to rely on vaccines that are made outside of Africa because they never come".