1 Pharmaceutical Firms Laud CBN’s N100bn Fund, Say Dollar Shortage Killing – Invest Data
Pharmaceutical Firms Laud CBN’s N100bn Fund, Say Dollar Shortage Killing

Pharmaceutical Firms Laud CBN’s N100bn Fund, Say Dollar Shortage Killing

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Post Views: 344 Seek Two-year Moratorium Pharmaceutical industry stakeholders in the Manufacturers Association of Nigeria (MAN), on Tuesday, commended...

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Seek Two-year Moratorium

Pharmaceutical industry stakeholders in the Manufacturers Association of Nigeria (MAN), on Tuesday, commended the Central Bank of Nigeria (CBN) for initiating and promptly disbursing the N100bn Health Intervention Fund, which many of their members have accessed successfully since it was introduced. 

They however urged the CBN to help beneficiaries with a special foreign exchange allocation to import critical raw materials and machinery to enable operators achieve the objective of the fund, specially boosting capacity.

Addressing participants at a virtual conference organised by Finance Correspondents Association of Nigeria (FICAN), the stakeholders urged for an extension of the moratorium to two years, from the one year stipulated in the guidelines. 

Mazi Ohuabunwa

In his remark at the conference, President of the Pharmaceutical Society of Nigeria (PSN), Mazi Sam Ohuabunwa, “from the feedback we get from most of us that have accessed the loans, they have put the money into equipment and material because of the shortage of foreign exchange and indeed, many are running a risk of losing a substantial value of this money and are losing in two sides: inflation and depreciation of the Naira.  

“We are now looking to buy forex from the parallel markets… and you know the rate at which parallel markets go. So, inflation and depreciation are major threats to proper utilisation of the funds.

“We want CBN to provide forex directly for that arm. They should not allow the manufacturers struggle with banks to look for forex, because anything worth doing is worth doing well,” he stressed.

He appreciated the fact that the requirements for accessing the facility can be easily met, following which many who applied especially those who are called the first tier have accessed the funds through corresponding commercial banks. 

Some of them, he stressed, have also been able to apply them to effect what they wanted to do with the money primarily to increase production capacity like “expanding plants, getting new equipment, starting new processes and procedures and expanding manufacturing both in terms of the type of area and other value addition.” 

In his presentation, Chairman of the Pharmaceutical Group of MAN and Founder/Chief Executive of Fidson Pharmaceutical Healthcare, Dr Fidelis Ayebae called for reversal of policies that could hamper the growth of the industry and the manufacturing sector at large. 

According to him, policy summersault such as imposing of Value Added Tax on locally manufactured pharmaceuticals, whilst allowing duty-free importation of finished products makes the local industry less competitive. 

“In an era where COVID-19 has ravaged the entire supply chain, slowed down imports, where access to forex have become terrible and we are also talking of the AfCTA coming up next year, they (government) have made us uncompetitive. One of the examples of government policy summersault that is not helping manufacturers, not only pharmaceutical companies, is VAT.

“When VAT  came in in the 1980s they exempted  pharmaceutical products, imported or input for manufacturing of pharmaceutical products so that the prices of pharmaceutical products are affordable to the man on the street.

“It had  remained like that up till three months ago when in FIRS announced that raw materials, and packaging materials with an input in pharmaceutical  product will now be VAT-able and before we could even blink they had  started collecting 7.5% VAT from local manufacturers. 

“The same thing is not applicable to imported finished products. In a situation where local manufacturers play catchup and where we are almost not competitive in terms of pricing with other  countries where huge capacities have been built  for competitiveness, how do you compete, when 7.5% is added to  your cost, which is already  too high for the ordinary Nigerian. 

“The local pharmaceutical manufacturer is bedeviled with policy summersault, even though we had reached out to the Federal Ministries of Finance; Trade; and NAFDAC (National Agency for Food and Drug Administration and Control). But, as we know, when these pronouncements have been made, the wheels g government is very slow to roll back.”

These are not helping the industry and “if you must grow this country and provide jobs for young Nigerians, industry is the quickest and the easiest way to develop a nation,” he noted.

He also lamented the congestion at the Apapa and Tin Can Island Ports, both in Lagos, that have remained congested, leading to increased cost of operations.

The Fidson boss lamented a situation where it costs N700,000 to transport a container from the Port to Guinness Nigeria Plc’s factory in Ikeja, also in Lagos, almost the cost of bringing the same container from India. To transport the same container to Maiduguri, Borno State, it will cost double, “so, how will the industry in Maiduguri become competitive …how will jobs be created?”

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