On Sunday, the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN) bemoaned the scarcity of foreign exchange in Nigeria, citing its detrimental impact on the local pharmaceutical industry.
Currency fluctuation was identified as a critical factor that led to the exodus of several multinational pharmaceutical companies in Nigeria.
PMG-MAN voiced the concern at a press conference in Lagos ahead of the 7th Edition of the Nigeria Pharma Manufacturers Expo(NPME) scheduled for September 4 and 5.
In August 2023, GlaxoSmithKline (GSK) ended its operations in Nigeria after 51 years, while French pharmaceutical manufacturer Sanofi left Nigeria in November.
The Chairman of the Local Organising Committee (LOC) for NPME 2024 and Managing Director of May & Baker, a pharmacist, Mr Patrick Ajah, stressed the need for a stable exchange rate in the country to advance the domestic pharmaceutical industry.
He said many companies are anticipating the implementation of the recently announced Executive Order to facilitate their operations.
The Executive order abolishing tariffs and Value-Added Tax (VAT) on pharmaceutical imports was signed by President Bola Tinubu on June 29.
This directive will eliminate tariffs and excise duties on specialised machinery, equipment, and pharmaceutical raw materials. This development will enhance the local production of vital healthcare products.
Ajah said: “Unless the value of Naira is fixed, achieving the country’s target of 70% in local drug manufacturing will remain a mirage.
“The government will need to do certain things to achieve 70% local drug production.
“The recent fluctuations in the value of the Naira have made it difficult for companies to plan and invest.
“This is one major reason why multinational companies are leaving. It’s not the fear of subsidy removal.
“If we didn’t tamper with the currency, all the multinational companies would be here and they would still be making more investments.
“But, if somebody brought his money, when they were bringing the money, all the money from outside by multinational companies would have to go through the banking system.
“I’m telling you because I was involved in it.
“And when it gets through the banking system, it will be at an official rate.
“So, you brought in money to come and build a facility at the exchange rate of N316, and now you’re going to be remitting the money at N1,500 and something, and you can’t even find the dollar.
“Many companies will not be able to cope. So fixing our exchange rate is going to be the one single thing that will immediately reset where we are.”
Ajah called for enhanced government support for the local pharmaceutical industry. He stated that with adequate support, Nigeria could manufacture 70% of the medicines it uses.