Naira instability threatens local drug production, PMG-MAN warns

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The Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria has indicated that the naira’s chronic depreciation against major foreign currencies must be addressed in order for President Bola Tinubu’s Executive Order on Pharmaceuticals to effectively enhance indigenous medication production.

Although PMG-MAN appreciated the order’s benefits, the group stressed that a stable currency rate is the most important component in the development of the domestic pharmaceutical business.

The pharma producers insisted that unless the naira’s value was stabilised, achieving 70% local medicine manufacturing would be unachievable regardless of the order.

The group stated that the Federal Government must begin enforcing the directive to avoid worsening the growing medicine prices.

In June, the Coordinating Minister of Health and Social Welfare, Prof. Ali Pate, announced that Tinubu had signed an executive order to increase local production of healthcare products such as pharmaceuticals, diagnostics, devices like needles and syringes, biologicals, and medical textiles, among others.

The directive, which will be carried out by authorities such as the Nigeria Customs Service, the National Agency for Food and Drug Administration and Control, the Standard Organisation of Nigeria, and the Federal Inland Revenue Service, will provide special waivers and exemptions for these products for two years.

Pate noted on his X account, formerly Twitter, “In a transformative move to revitalize the Nigerian health sector, His Excellency President Bola Ahmed Tinubu, GCFR @officialABAT, has signed an Executive Order aiming to increase local production of healthcare products (pharmaceuticals, diagnostics, devices such as needles and syringes, biologicals, medical textile, etc.).”

The immediate cause of the naira’s current instability has been connected to the Tinubu administration’s decision to float the national currency by eliminating several exchange regimes, leaving the naira vulnerable to market forces.

Speaking in Lagos recently before of the 7th Edition of the Nigeria Pharma Manufacturers Expo, which will take place from September 4th to 5th, 2024, Patrick Ajah, Chairman of the Local Organising Committee, urged the Federal Government to establish a deadline for the executive order’s implementation.

Ajah stated that the government would need to take specific steps to attain 70% local medication manufacturing, adding that recent swings in the value of the naira had made it harder for businesses to plan and invest.

Ajah, the chemist and Managing Director of May & Baker Nigeria Plc, stated that simply issuing an executive order is insufficient; a deadline for implementation is required.

He warned that delays in the order’s execution by the Federal Government entities concerned could result in drug shortages, which the directive attempts to address by increasing local pharmaceutical manufacturing and limiting importation.

He also emphasised the need for the government to follow up and ensure the full implementation of the order.

Ajah said, “Nobody has engaged us in the process. Let me be honest, if the government does not ensure the implementation of this, it can turn around to be negative. Many companies are waiting for the implementation.

“If we keep delaying the things that companies should have placed orders for, there will be scarcity. And if the implementation doesn’t start immediately, we’ll have a situation where you do not know where we’re going.

“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.”

Expressing worry about the negative impact of foreign exchange scarcity on the industry, Ajah disclosed that many companies are waiting to see if the recently announced executive order will be implemented before placing import orders.

He called for increased government support for the local pharmaceutical industry, stressing that with the right backing, Nigeria can produce 70 per cent of the medicines it consumes.

Giving insight into the Expo, Executive Secretary of PMG-MAN, Frank Muonemeh, urged the government to provide support to the pharmaceutical sector similar to that which has been provided to other sectors, such as cement and petroleum.

Muonemeh expressed optimism that Nigeria could achieve the goal of producing 70 per cent of its medicines with the right government support, adding that increased exports from the domestic pharmaceutical industry would also help alleviate the country’s foreign exchange challenges.

On the 2024 Edition of NPME, with the theme “40 Years of Advocacy: Fostering Partnership and Innovation to Unlock the Pharma Manufacturing Value Chain in Nigeria, Central & West Africa,” Muonemeh said their ambitious goal seeks to reverse the country’s dependency on imported medicine from 70 per cent to 70 per cent locally produced.

He said the 7th NPME 2024 is the flagship expo and the largest pharmaceutical manufacturing exhibition in Central and West Africa, organized by PMG-MAN and partners, GPE India.

“Experts predict that the Nigerian pharma space would be the next frontier for smart investment and trade, with great but largely untapped potential to contribute to national and regional development.

“To unlock this potential, the group organizes a biennial Pharma Expo and Exhibition, focusing on the latest pharma technology, machinery, equipment, Active Pharmaceutical Ingredients, and showcasing locally manufactured medicines, diagnostics, and consumables,” he said.