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‘Capacity utilisation drops to 20% in drug manufacturing sector’


Okey Akpa

Okey Akpa

Albeit Federal Government’s intervention in terms of improved access of manufacturing firms to foreign exchange, the pharmaceutical manufacturing sector has decried a drop in capacity utilisation to an all-time low of 20 per cent, even as many firms have shut down operations.

According to Pharmaceutical Manufacturers Group of Manufacturers Association of Nigeria (PMG-MAN), while the decision by the Central Bank of Nigeria (CBN) to ensure that 60 per cent of foreign exchange is made available to manufacturers for raw materials, there is a need to address the anomalies created by the Common External Tariff (CET) of the Economic Community of West African States (ECOWAS).

Chairman, PMG-MAN, Okey Akpa, stated that efforts made so far in addressing the CET imbalance were laudable, but warned that the high attrition rate in the sector, and the consequences of further delays indicated the need for government’s imminent intervention.

“Government needs to urgently address the anomaly created by CET, whereby imported medicines attract zero duty while raw and packaging materials for local manufacturing attract up to 20 per cent duty.

“The Pharmaceutical Manufacturing sector, usually considered the lifeline of the National Healthcare system has been wracked with the desperate challenges as operations in most factories have almost ground to a halt

“Researches over the last 18 months indicate that capacity utilisation among Pharma manufacturers is at an all-time low of 20 per cent; and 43 firms, representing 30 per cent of the PMG-MAN members have shut down production owing to lack of access to forex for critical raw materials, mainly active pharmaceutical ingredients and machinery inputs”, he added.

He noted that access to funding at single digit interest rate was another urgent intervention needed to reverse the catastrophic decline in the sector, adding that successful implementation of the CBN directive to Banks to prioritise manufacturers in forex sales will boost local manufacturing, as well as improve access to medicines for Nigerians.

He stated that: “We view this policy positively as it has the potential not only to increase Nigerians’ access to medicines, but also support massive employment in the sector, improve the economy and facilitate export of Nigerian medicines to neighbouring countries. These are cardinal objectives of the present Government.

“PMG-MAN is therefore eager to partner with Government to ensure its successful implementation, particularly in the areas of research, policy monitoring, evaluation, and modification.”

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