Manufacturers in the pharmaceutical sector have appealed to the Federal Government, the Central Bank of Nigeria (CBN) and financial institutions to grant them incentives to boost local drug production from its current 30 per cent to 80 per cent.

They said it was unfortunate that there are no government financial interventions to empower the manufacturing industry, just as they decried the harsh monetary policies affecting local production and jeopardising the national security of the country.

The manufacturers submitted to St. Racheal’s Pharma Finance Forum with the theme, ‘Manufacturing Renaissance: The Role of Financial Institutions in the Renewed Hope of Nigeria,” held in Lagos. They said everyone must collaborate to provide financial solutions to grow the country’s manufacturing industry and the economy.

The Chief Executive Officer, St. Racheal’s Pharma, Akinjide Adeosun, lamented that the government is killing the pharma manufacturing industry with the single-digit loan interest rate policy, which is as high as 24 per cent, thereby putting local production of drugs as low as 30 per cent.

Adeosun also decried the difficult collateral of banks before giving out loans to manufacturers, despite the unavailability of grants for the importation of drugs and active ingredients for its production in the country.

He also lamented that the Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS) and Standard Organisation of Nigeria (SON) among other government agencies, are continuously chasing manufacturers to squeeze out money from them, thereby making the business environment unfriendly and discouraging local production.

Adeosun urged the government to support world-class local pharma manufacturing through long-tenor and moratoria loans with single-digit interest is desirable for the country to transition from 30 per cent product to 80 per cent.

He also urged CBN to reduce the cash reserve requirement (CRR) of deposit money banks (DMBs) from 32.5 per cent to 10 per cent.

Adeosun warned that if the pharma manufacturing industry were not financially supported, as done with the agricultural sector and others, Nigeria would run into a drug crisis as experienced during COVID-19.

He also urged national and sub-national governments to support the industry through the Public Private Participation (PPP) model, such as with the Dangote refinery.

This is just as Adeosun disclosed St Rachel Pharma’s plan of setting up the biggest manufacturing plant in the country in the next five to 10 years while urging the Bank of Industry (BOI) and the Development Bank of Nigeria (DBN) to support its realisation with funding.

Adeosun noted that the country’s national security cannot be assured if it relies on large-scale importation, adding that with 70 per cent of drugs imported into the country, it poses a threat to the economy.

The Managing Director of PBR Life Sciences, United Kingdom, Ayodeji Alaran, said the local manufacturing industry has demonstrated resilience and capacity to close gaps if given the needed support and protected from pressures from other players outside the country, who have advantages of access to finance and an environment supportive of local manufacturing.

He said with the high import dependency and significant exposure of Nigeria to a shortage of supply of both active and finished products in 2020 as well as the enormous hurdles the pharmaceutical industry faced in 2022, the industry requires the support of the government and regulators to continue to serve the nation.

Alaran also added that the existing financing model with a high interest rate from banks is not sustainable while calling for the need to scale support with low-interest rate financing.

He said this will enable the $1.2 billion pharma manufacturing industry to secure Nigeria’s Gross Domestic Product (GDP) with $440.8 billion.

The Executive Director/Chief Finance Officer of the Development Bank of Nigeria (DBN), Mrs. Ijeoma Ozulumba, said the manufacturing sector contributes to the country’s economic growth by providing goods for domestic consumption and export, stimulating industrialisation, diversifying the economy and reducing dependence on oil revenue.

She said the manufacturing sector also contributes to value chain development, promotes the growth of other sectors and generates foreign exchange earnings, which contribute to Nigeria’s balance of trade and increase its foreign reserves.

Ozulumba said financial institutions play a crucial role in developing the local manufacturing sector by providing various monetary services and support.

She urged financial institutions to actively engage in policy advocacy and collaborate with government agencies and industry stakeholders to create an enabling environment for the growth and sustainability of the manufacturing sector.

The Divisional Head (LE-3), Bank of Industry (BOI) Limited, Ahmed Kagara, said the pharmaceutical industry and healthcare are the most successful and have the highest performance rating in the country.

He said BOI is impressed by the performance of the pharma industry, which is why it came up with a good structure for financing as the bank has given over N500 billion in the last few years.