The Lagos Chamber of Commerce and Industry, (LCCI) has said that the recent Executive Order introducing zero tariffs, excise duties, and Value-Added Tax (VAT) on imported pharmaceutical inputs is an initiative that will unlock the healthcare value chain.
Director General of LCCI, Chinyere Almona who disclosed this in a statement said by significantly reducing production costs, this initiative will enhance the competitiveness of local manufacturers.
She said the recent exit of some pharmaceutical firms has made drug availability difficult, leading to higher costs of medications.
Describing the policy intervention as step in right direction,she said the successful implementation of this order requires close collaboration among the relevant Ministries, Departments, and Agencies (MDAs).
She said a harmonised Implementation Framework should be developed to ensure efficient execution while agencies such as the Nigeria Customs Service, National Agency for Food and Drugs Administration Control (NAFDAC), Standard Organisation of Nigeria (SON) and Federal Inland Revenue Service (FIRS) should create a smooth operational environment, eliminating bureaucratic delays and bottlenecks.
She said the LCCI acknowledges that eliminating taxes on crucial inputs paves the way for a revitalized local pharmaceutical industry and improved access to affordable healthcare products.
Citing an example, she said countries like India and China have successfully implemented similar policies and have become major drug manufacturing hubs in their regions.
She said Nigeria’s new directive should align with these successful models to enhance local manufacturing capacity and reduce import dependency.
She pointed out that in Nigeria, about 70 per cent of the country’s pharmaceutical needs are met through imports and this heavy reliance on imports is primarily due to limited local production capacity and various challenges in the sector such as high production costs and regulatory hurdles.
She said If sustained, this policy can position Nigeria as a drug manufacturing hub for sub-Saharan Africa, leveraging the African Continental Free Trade Area (AfCFTA) to expand drug exports across the continent. Local manufacturers can also sign supply contracts and franchisee arrangements with leading exporters from India, China, and Europe.
The LCCI Medical and Pharmaceuticals Group comprises long-standing drug manufacturers who have operated under a very harsh business environment, especially regarding the importation of critical inputs for production, harassment from regulatory authorities, and high costs of logistics moving across the country. We therefore urge the government to pay attention to research and development, cross-country logistics, insecurity, and market access to the African continent.