By Adedapo Adesanya
The Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN) has called on the government to bring down the interest and exchange rates.
The group attributed fluctuations in forex as a major reason for the exit of some pharmaceutical multinationals from Nigeria.
The group at a news conference in Lagos on the forthcoming 7th Edition of the Nigeria Pharma Manufacturers Expo (NPME) from September 4 to 5, 2024, bemoaned the paucity of FX in the country, saying it had negatively affected the local pharmaceutical industry.
Recall that some multinational pharmaceutical companies, including GlaxoSmithKline and Sanofi Nigeria Limited, exited the country within the past year.
The Chairman of the Local Organising Committee (LOC) of NPME 2024, Mr Patrick Ajah, said that for the domestic pharmaceutical industry to progress, a stable exchange rate was essential.
Mr Ajah, a pharmacist and the Managing Director of May & Baker, said that many companies are also on standby for the implementation and take-off of the recently announced Executive Order.
On June 29, President Bola Tinubu signed an Executive Order removing tariffs and Value-Added Tax (VAT) on pharmaceutical imports.
The order introduces zero tariffs, excise duties, and VAT on specialised machinery, equipment and pharmaceutical raw materials to bolster local production of essential healthcare products.
The order has yet to take effect.
“Unless the value of Naira is fixed, achieving the country’s target of 70 per cent in local drug manufacturing will remain a mirage.
“The government will need to do certain things to achieve 70 per cent local drug production.
“The recent fluctuations in the value of the Naira have made it difficult for companies to plan and invest.
“This is one major reason why multinational companies are leaving. It’s not the fear of subsidy removal.
“If we didn’t tamper with the currency, all the multinational companies would be here and they would still be making more investment.
“[However], if somebody brought his money, when they were bringing the money, and all the money from outside by multinational companies will have to go through the banking system.
“I’m telling you because I was involved in it. And when it gets through the banking system, it will be at the official rate.
“So, you brought in money to come and build a facility at the exchange rate of N316, and now you’re going to be remitting the money at N1,500 and something, and you can’t even find the Dollar.
“Many companies will not be able to cope. So fixing our exchange rate is going to be the one single thing that will immediately reset where we are,” he said.
Mr Ajah also called for increased government support for the local pharmaceutical industry.
According to him, with the right support, Nigeria can produce 70 per cent of the medicines it consumes.
He cited India as an example, saying that the country supported its domestic pharmaceutical industry, and today, India is notable for drug manufacturing.
“The Indian government has provided financial and technical assistance to local manufacturers, and has even intervened to secure technology from other countries,” he said.
Mr Ajah asserted that Nigeria had the capacity for local production of diverse drugs but that many companies lacked the financial resources to invest in new facilities or upgrade existing ones.
According to him, the recent devaluation of the Naira worsened the challenge.
He called for a reduction in interest rates, saying that the current rates, which are as high as 30 per cent, present a major barrier to investment in the industry.
On his part, Mr Frank Muonemeh, the Executive Secretary of PMG-MAN, asserted that local pharma manufacturers were currently producing 40 per cent of the medicines used in the country.
He, however, urged for partnerships between governments and local companies, similar to what was being given to other industries such as the cement manufacturing and petroleum industries.
Mr Muonemeh stressed that a strong domestic pharmaceutical industry would strengthen national security.
The 2024 Edition of NPME, the PMG-MAN is themed 40 Years of Advocacy: Fostering Partnership and Innovation to Unlock the Pharma Manufacturing Value Chain in Nigeria, Central & West Africa.
Aduragbemi Omiyale