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Pharmaceutical Multinationals Exit Nigeria Due to Forex Scarcity, Says PMG-MAN

Written by Jerry Alomatu on July 15, 2024

News Views: 46

The Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN) on Sunday lamented the severe foreign exchange shortage in the country, stating it has significantly impacted the local pharmaceutical industry.

They cited fluctuations in forex as the primary reason for the departure of several pharmaceutical multinationals from Nigeria.

The group expressed their concerns during a news conference in Lagos ahead of the 7th edition of the Nigeria Pharma Manufacturers Expo (NPME), scheduled for Sept. 4 and 5.

Reports from NAN indicate that multinational pharmaceutical companies, including GlaxoSmithKline and Sanofi Nigeria Ltd, have left the country within the past year. GlaxoSmithKline (GSK) ceased operations in Nigeria in August 2023 after 51 years, while French pharmaceutical company Sanofi exited in November.

The Chairman of the Local Organising Committee (LOC) for NPME 2024, Mr. Patrick Ajah, emphasized that a stable exchange rate is crucial for the progress of the domestic pharmaceutical industry. Ajah, a pharmacist and Managing Director of May & Baker, noted that many companies are awaiting the implementation of the recently announced Executive Order.

On June 29, President Bola Tinubu signed an Executive Order removing tariffs and Value-Added Tax (VAT) on pharma imports, introducing zero tariffs, excise duties, and VAT on specialized machinery, equipment, and pharmaceutical raw materials to boost local production of essential healthcare products. However, the order has yet to take effect.

Ajah stated, “Unless the value of the naira is stabilized, achieving the country’s target of 70 percent local drug manufacturing will remain a mirage.”

He highlighted that recent fluctuations in the naira’s value have made it difficult for companies to plan and invest, leading to the exit of multinational companies. Ajah stressed the need for government intervention to stabilize the exchange rate and support local pharmaceutical manufacturing.

Ajah also called for reduced interest rates, noting that current rates of up to 30 percent hinder investment in the industry. He urged the government to provide financial and technical support to local pharmaceutical manufacturers, similar to the support given to other industries like cement and petroleum.

Mr. Frank Muonemeh, Executive Secretary of PMG-MAN, noted that local pharmaceutical manufacturers currently produce 40 percent of the medicines used in Nigeria. He called for partnerships between the government and local companies to strengthen the domestic pharmaceutical industry, which he said would enhance national security.

Muonemeh pointed out that India’s support for its domestic pharmaceutical industry has made it a notable drug manufacturing hub. He advised the Federal Government to adopt a similar approach to ensure Nigeria can achieve the goal of producing 70 percent of its own medicines and help alleviate the country’s foreign exchange challenges.