President Bola Tinubu has taken a significant step towards enhancing Nigeria’s healthcare system by signing an Executive Order to promote the domestic Manufacturing of medical supplies and lower prices. Healthcare products that are the focus of attention encompass a wide range of items, including pharmaceuticals, diagnostics, devices like biologicals, needles and syringes and medical textiles. Muhammad Pate, the Coordinating Minister of Health and Social Welfare, announced the new policy, which would eliminate tariffs, excise duties, and Value-added Tax (VAT) on certain machinery and raw materials.
In a post on X, Mr. Pate confirmed his previous suggestion about the executive order from February, stating that the new initiative will not only cut production expenses but also boost the competitive edge of local manufacturers. Over recent months, the country has faced increasing medication costs, largely due to the departure of several multinational pharmaceutical companies. The nation’s heavy reliance on imported goods was highlighted when pharmaceutical giants such as GlaxoSmithKline (GSK) and Sanofi decided to leave the country.
Cooperation and market research will improve healthcare.
According to Mr Pate, the Attorney General of the Federation, Lateef Fagbemi, it is anticipated that the next steps will be taken towards unlocking the new order. The minister emphasised the importance of the order for the successful implementation of the healthcare value chain initiative, which the president gave approval to in October 2023. The new Executive Order emphasises the importance of Active Pharmaceutical Ingredients (API), excipients, and other essential materials for producing key health products such as medications, syringes, needles, insecticidal nets, and rapid diagnostic kits.
Also, the order includes provisions for creating market influence tools like framework agreements and volume assurances to support domestic producers. He emphasized the importance of cooperation among the Trade, Health, Industry, Finance, and Investment Ministers in creating a unified implementation plan, streamlining the approval process, and eliminating limitations. The minister highlighted that various agencies, such as the Nigeria Customs Service, National Agency for Food and Drug Administration and Control (NAFDAC), Standard Organisation of Nigeria, and Federal Inland Revenue Service (FIRS), will be responsible for promptly enforcing the implementation and offering special waivers and exemptions for two years.
Local drug manufacturers have invested $2B in new facilities.
He further mentioned that this directive signifies a shift towards using market-driven rewards to promote the industry’s development, lower medical goods’ expenses through domestic production in the long run, generate and preserve economic worth, and facilitate the growth of employment in the healthcare sector. In February, NAFDAC reported that 105 applications for building drug manufacturing facilities had been given the green light nationwide. As per an official record validated by NAFDAC’s Director General, Mojisola Adeyeye, 35% of the authorised projects have finished their Construction phase.
Furthermore, the applicants were observed to be in various phases of the registration process according to the current guidelines they set for the country’s pharmaceutical plant setup. More than 20 local drug manufacturers who recently registered with the agency have collectively contributed $2 billion to building and finishing facilities that meet World Health Organization (WHO) standards. These facilities produce high-quality pharmaceuticals and crucial medicines for people across the country. Mrs Adeyeye emphasised that the focus is on enhancing local production rather than filling the void left by international pharmaceutical companies departing the country. These advancements signify positive growth for the country.
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Moreover, the Executive Order marks a pivotal shift in the country’s healthcare landscape. By eliminating Tariffs and taxes on essential manufacturing materials, the initiative will enhance local production, reduce costs, and improve the availability of critical medical supplies. The collaborative efforts of various government ministries and agencies will be crucial in ensuring successful implementation. As local manufacturers expand their capabilities, the country can look forward to a more self-reliant healthcare sector, improved access to affordable medical products, and a strengthened Economy with increased employment opportunities.