THE ANC wants the government to establish a state-owned pharmaceutical company that will meet health challenges facing the country, particularly HIV-Aids.

This was discussed during a party lekgotla held last weekend in Irene, Pretoria.

Yesterday ANC secretary-general Gwede Mantashe said the party had received a health report indicating that the number of people tested for HIV-Aids had increased six-fold, from two million per annum to 12million per annum.

He said there was a compelling case for establishment of such a pharmaceutical firm since South Africa consumes 25 percent of ARVs in the world.

"We held serious discussions at the lekgotla about the cabinet looking into starting a state pharmaceutical company.

There is a compelling case for it,' Mantashe said.

A resolution was also passed at the ANC 2007 Polokwane conference that the government should explore the establishment of a state-owned pharmaceutical company.

South Africa has at least 5,7million people infected with HIV - one of the heaviest caseloads in the world. It also has one of the largest treatment programmes.

Mantashe said there were many countries which owned pharmaceutical companies and that this did not mean private companies would collapse.

"A state-owned pharmaceutical company does not mean pharmaceutical companies will be closed," Mantashe said.

Other reports tabled at the lekgotla were on education, health, infrastructure, rural development and local government.

The lekgotla accepted the demerger of the Medunsa Medical School from the University of Limpopo.

Budgeting processes of municipalities are also to be reviewed to ensure their effectiveness.

Mantashe said the lekgotla also agreed to implement the creation of an office of the land valuer general as well as the land management commission.

The decisions taken by the lekgotla will inform the programme of government which would be discussed at the Cabinet lekgotla later this month.