On Sunday, the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN) expressed concerns about the scarcity of foreign exchange in the country, highlighting its detrimental impact on the local pharmaceutical industry. They identified forex fluctuations as a significant factor behind the departure of some multinational pharmaceutical companies from Nigeria.
During a news conference in Lagos ahead of the upcoming 7th Edition of the Nigeria Pharma Manufacturers Expo (NPME), scheduled for September 4 and 5, the group addressed these issues.
Over the past year, notable multinational pharmaceutical companies such as GlaxoSmithKline (GSK) and Sanofi Nigeria Ltd have exited the Nigerian market. GSK ended its 51-year presence in Nigeria in August 2023, and Sanofi, a French pharmaceutical manufacturer, left the country in November.
Patrick Ajah, Chairman of the Local Organising Committee (LOC) for NPME 2024 and Managing Director of May & Baker, stressed that a stable exchange rate is crucial for the domestic pharmaceutical industry’s progress. Ajah, who is also a pharmacist, mentioned that many companies are awaiting the implementation of the recently announced Executive Order.
President Bola Tinubu signed an Executive Order on June 29, removing tariffs and Value-Added Tax (VAT) on pharmaceutical imports. This order introduced zero tariffs, excise duties, and VAT on specialized machinery, equipment, and pharmaceutical raw materials to enhance local production of essential healthcare products. However, this order has yet to be implemented.
Ajah stated, “Unless the value of the Naira is stabilized, achieving the country’s target of 70 percent local drug manufacturing will remain elusive. The government needs to take specific actions to achieve this goal.”
He added that the recent fluctuations in the Naira’s value have made it challenging for companies to plan and invest, which is a primary reason for multinational companies leaving Nigeria. He emphasized that the issue is not related to subsidy removal but to the volatility of the currency.
Ajah explained, “If the currency had not been tampered with, all the multinational companies would still be here and making more investments. However, the significant changes in exchange rates make it difficult for companies to manage their finances and operations.”
He called for increased government support for the local pharmaceutical industry, asserting that with the right support, Nigeria could produce 70 percent of the medicines it consumes.
