Pharmaceutical stakeholders commend CBN on Health Sector Fund

• solicit for two-year moratorium

Operators in the Nigerian pharmaceutical industry have commended the Central Bank of Nigeria (CBN) for the disbursement of the N100 billion Health Sector Intervention fund.

Speaking at a virtual conference organised by the Finance Correspondents Association of Nigeria (FICAN) in Lagos on Tuesday, pharmaceutical industry stakeholders testified that many operators in the sector have received approvals for accessing the facility.

President of the Pharmaceutical Society of Nigeria, Mr. Sam Ohuabunwa, in his remarks noted that the requirements for accessing the facility are such that can be easily met.

He said “practitioners in the industry have all they can to access these funds and I am aware that many of them who applied, especially those who are called the first tier, have received approvals and have also accessed the funds through correspondent commercial banks.

“I am also aware that a couple of the beneficiaries have been able to apply for the fund to effect what they wanted to do with it.

“Most of them on capacity 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.”

He however urged the CBN to look into the provision of foreign exchange for manufacturers and also grant a two-year moratorium as against the one year that is stated in the guideline for accessing the facility.

“We are appealing to CBN to make a special allocation for all those who are beneficiaries of this facility to be given forex to import what is needed to boost their capacity and also to elongate the moratorium which is perhaps the easiest thing for CBN to do or reducing the rate. Instead of one-year moratorium they can give two-year moratorium and extend the repayment further down the line.

“Based on feedback from most of us that have accessed the loans, they have put the money into equipment and material. However, because of shortage of foreign exchange, many are running a risk of losing a substantial value of this money and are losing on two sides – inflation and depreciation of the Naira.

“Many 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 have also requested CBN to make a special provision for pharmaceutical industry and other healthcare entrepreneurs who have taken advantage of this healthcare and pharmaceutical fund to provide forex directly for them.

“CBN should not allow the manufacturers struggle with banks to look for forex because anything worth doing is worth doing well.”

On his part, The Chairman of the Pharmaceutical Sector of the Manufacturer Association of Nigeria (MAN) and Founder/ Chief Executive of Fidson Pharmaceutical, Dr Fidelis Ayebae called for reversal of polices that could hamper the growth of the pharmaceutical industry and the manufacturing sector at large.

According to him, policy summersault such as the imposing of value added tax on local pharmaceutical manufacturers 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 has become terrible and we are also talking of the AfCTA coming up next year, they have made us uncompetitive. One of the examples of government policy summersault that is not helping manufacturers and pharmaceutical companies, is VAT.

“When VAT came in the 1980s, they exempted pharmaceutical products from VAT, and 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 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 per cent VAT from local manufacturers.

“The same thing is not applicable to imported finished products. In a situation where local manufacturers are playing catchup and where he is 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 per cent is added to your cost which is already too high for the ordinary Nigerian?

“The local pharmaceutical manufacturing is bedeviled with policy summersault even though we had reached out to federal ministry of finance, trade and NAFDAC, but as we know, when these pronouncements have been made, the wheels of government are very slow to roll back.

“In the last three months, importers are enjoying a duty-free window and local manufacturers are suffering a 7.5 tax penalty. They 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 said.