In the pharmaceutical sector, manufacturers have appealed to the government and financial institutions, including the Central Bank of Nigeria (CBN) to acknowledge incentives which will promote the local production of drugs from 30 percent, which is the current rate, to 80 percent. They added that it is quite disheartening that there are no financial interventions from the government that will enhance the production industry. Similarly, there are rigid monetary policies that have jeopardised local production and the country’s national security. This appeal was submitted to St. Racheal’s Pharma Finance Forum which was held in Lagos with the theme, “Manufacturing Renaissance: The Role of Financial Institutions in the Renewed Hope of Nigeria”.
General collaboration from everyone is required in order to ensure financial solutions which will boost the economy and manufacturing industry of the country. Akinjide Adeosun, the Chief Executive Officer of St. Racheal’s Pharma, decried that the pharma manufacturing industry is being harmed by the government, through the interest rate policy (single-digit loan) which is 24 percent high, decreasing local drug production to 30 percent. He highlighted the difficult collateral required by banks before granting loans to manufacturers in spite of inaccessibility to grants to purchase effective ingredients for production.
St. Racheal Pharma to set up the biggest production plant in Nigeria.
Adeosun also lamented that among other government sectors, Standard Organisation of Nigeria (SON), Nigeria Customs Service (NCS) and the Federal Inland Revenue Service (FIRS), are continually squeezing money out of manufacturers, hampering the business environment by discouraging local production and making it unfriendly for trade. He implored the government to assist the world-class local pharma production through moratoria loans with interest, single-digit, which is beneficial to move from 30 percent to 80 percent product for the country.
He encouraged the CBN to decrease the cash reserve requirement (CRR) of deposit money banks (DMB) by 22.5 percent — from 32.5 percent to 10 percent. He forewarned that Nigeria would dive into drug crisis like during the pandemic if, financially, pharma manufacturing sector was not supported, like the agricultural sector is. In addition, he implored the sub-national and national government to assist the industry using the Public Private Participation (PPP) model, for example Dangote refinery. He also stated the plan of St. Racheal Pharma to set up the biggest production plant in Nigeria in the next half to decade. He said this when he urged the Development Bank of Nigeria (DBN) and Bank of Industry (BOI) to promote its establishment with funding.
The industry requested the assistance of regulators & the gov’t.
According to Adeosun, the national security of Nigeria is not certain if it depends on large-scale importation as about 70 percent of drugs are imported, threatening the economy of the country. Ayodeji Alaran, The Managing Director of PBR Life Sciences, United Kingdom, stated that the manufacturing industry at the local level has showed capacity and resilience to bridge the gaps if sufficient protection from pressures outside the country and support are given. The industry requested the assistance of regulators and the government to serve the country.
While advocating the need to scale support even at the minimum level of financing low-interest rate, stated that the established financing models has a high interest rate from banks which is unsustainable. Alaran affirmed that the $1.2 billion pharma producing industry will be able to boost Nigeria’s GDP by $440.8 billion. Mrs. Ijeoma Ozulumba, the Executive Director and Chief Finance Officer of the Development Bank of Nigeria (DBN), asserted that the production sector promotes economic growth in the country through the stimulation of industrialization, reduction of dependence on oil revenue, provision of goods for domestic consumption and export, and diversification of the economy.
Financial institutions are essential to promote local manufacturing.
Ozulumba stated that there is contribution to value chain development by the manufacturing sector to enhance the development of other sectors for the generation of exchange earnings, which further promotes increase in foreign reserves and balance of trade in Nigeria. She asserted that financial institutions are essential to the development of the local manufacturing sector to provide support through different monetary services. Also, she implored all financial institutions to collaborate with industry stakeholders and take part in policy advocacy with government agencies in order to establish a productive environment for sustainability and growth of the sector.
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