Pharmaceutical companies have commended the Central Bank of Nigeria, CBN, for prompt disbursement of the N100 billion Health Sector Intervention fund.
They 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.
Speaking at a virtual conference organised by Finance Correspondents Association of Nigeria (FICAN) in Lagos on Tuesday, pharmaceutical industry stakeholders testified that many operators in the sector have accessed while others have received approvals for accessing the facility.
President of the Pharmaceutical Society of Nigeria ( PSN) Mr. Sam Ohuabunwa in his remarks appealed to CBN to make a special allocation for all those who are beneficiaries of this facility to be given oreign exchange (forex) to import what is needed to boast their capacity.
He also asked for elongation of the moratorium which is perhaps the easiest thing for CBN to do or reducing the rate.
According to him, instead of one-year moratorium, CBN can give two- year moratorium and maybe extend the repayment further down the line.
Ohuabunwa said, “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 have also sent and issued requests to CBN to make a special forex provision for pharmaceutical industry and other healthcare entrepreneurs who have taken advantage of this healthcare and pharmaceutical sector fund.
” 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 noted that the requirements for accessing the facility are such that can be easily met as 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 has received approvals and I am aware that they have also accessed the funds through corresponding commercial banks.
“I am also aware that a couple of them have also been able to apply them to effect what they wanted to do with the money. Most of them on capacity increase 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.”
On his part, the Chairman of the Pharmaceutical Sector of the Manufacturer Association of Nigeria (MAN) and Founder/ Chief Executive of Fidson Pharmaceuticals, Dr Fidelis Ayebae called for reversal of policies 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 have 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, 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 per cent VAT from local manufacturers.
“The same thing is not applicable to imported finished products. In a situation where local manufacturers is 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 manufacturer 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 pronouncement has been made, the wheels g government is very slow to roll back.”
Ayebae observed that these last three months, importers are enjoying a duty free window and local manufacturers are suffering a 7.5 tax penalty.
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.