Stakeholders have called for coordinated enforcement of the executive order that eliminates tariffs, excise duties, and value-added tax on imported pharmaceutical ingredients by President Bola Tinubu, emphasising the need for long-term solutions to Nigeria’s manufacturing challenges.
A broad section of the organised private sector welcomed the executive order, including the Lagos Chamber of Commerce and Industry, Director-General, Dr Chinyere Almona, who saw it as a bold move aligned with the broader initiative to unlock the healthcare value chain.
In a statement, Almona projected a significant reduction in production costs and an enhancement of the competitiveness of local manufacturers in the face of the recent exit of some pharmaceutical firms, which had made drug availability difficult and led to higher costs of medications.
“This policy intervention has come at a good time,” she stated.
The Manufacturers Association of Nigeria also lauded the executive order, noting that it would enable local manufacturers to fill the gap created by the exit of pharmaceutical manufacturing companies, including GlaxoSmithKline.
The Director-General of MAN, Segun Ajayi-Kadir, highlighted the various challenges that have strained the manufacturing sector, which the executive order aimed to tackle.
He said, “The exchange rate has hit the roof. The rate at which we calculate import duty has gone up and the removal of fuel subsidy has tended to impact our logistics costs and purchases, which have been quite low. Now that duty has been removed, it will make our imports cheaper, so to speak, and that will translate to lower prices.”
The MAN DG noted that stakeholders were looking to import more and expand their production capacity, which he believed would affect the price at which the companies sell their products.
He stated that an overall reduction would only happen when the costs of pharmaceutical products and raw materials decreased.
An economist and former President of the Charted Institute of Banking of Nigeria, Prof. Segun Ajibola, called the executive order a stop-gap measure that should give way to a more permanent solution.
He stated in a phone conversation with The PUNCH that excessively high drug prices were the most pressing issue in Nigeria.
He, however, noted that the import duty waiver would not do much to reduce the prices of drugs in the country.
“The President’s step is commendable. It is a life-saving order. But manufacturers will still import their raw materials at the existing foreign exchange prices, which means prices will still be higher than they originally were,” he said.
The professor at Babcock University stated that for the majority of the Nigerian population to benefit from a strong healthcare system, it is crucial to enhance local manufacturing to produce drugs within the country and to obtain raw materials domestically.
Also, the CEO of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, hailed the executive order as a fiscal policy measure with better prospects of addressing supply-side challenges in the economy.
He stressed the need for the executive order to be well-targeted and the measure replicated to boost production in other segments of the real sector.
Yusuf said, “We need similar executive orders for agriculture, agrochemicals and agro-allied industries, to curb the surging food inflation. We need similar intervention in the energy sector, to promote energy security and incentivise private investments in the sector.
“There is a need for similar support for the iron and steel sector to aid the construction industry and reduce construction costs for housing and infrastructure and a fiscal policy protection to support domestic investments in petroleum refineries to conserve foreign exchange, create jobs, and deepen backward integration.”
The CPPE boss declared that Nigeria must be ready to trade off some revenue in the short term for the economy to be better off in the medium to long term.