As part of its effort to support the resilience of the healthcare sector, the Central Bank of Nigeria (CBN) said it has disbursed N498.00 million to two healthcare projects under the Healthcare Sector Intervention Facility (HSIF), bringing the cumulative disbursements to N108.85 billion for 118 projects, comprising of 31 pharmaceuticals, 82 hospital and four other services.
As part of proactive measures to cushion the impact of the Covid-19 pandemic on the economy, the CBN in March 2020, introduced a N100 billion credit support intervention for the healthcare industry.
The CBN has been collaborating with the banks to ensure that the funds were disbursed to the beneficiaries.
One of the beneficiaries of the fund, Marcelle Ruth Cancer Centre, admitted during its launch in April 2021. Bolaji Odunsi, Chairman of the hospital, acknowledged the contribution of the CBN and Polaris Bank.
“We have been beneficiaries of the Covid-related healthcare intervention fund and in particular we want to mention the support of Polaris Bank who helped us navigate the process. Without them, things would have been a lot more difficult,” Odunsi said.
The CBN’s N100 billion intervention fund for healthcare aims to strengthen the sector’s capacity to meet potential increase in demand for healthcare products and services. The scheme is to provide credit to indigenous pharmaceutical companies and other healthcare value chain players intending to build or expand capacity.
The scheme is expected to increase private and public investment in the healthcare sector, facilitate improvements in healthcare delivery and reduce medical tourism to enhance foreign exchange conservation.
The CBN Credit support for the Healthcare sector is an on-lending intervention scheme for the Healthcare sector developed as part of the pro-active measures to cushion the economic impact of the coronavirus (COVID-19) pandemic.
Assessment of the impact of the fund shows that the health sector has seen players access the fund to alleviate the harsh effects of the pandemic and in fact, set them on a real path of recovery.
BusinessDay findings show that most local pharmaceutical industries with the aid of the fund have boosted their production capacities to manufacture facemasks, personal protective equipment (PPP), hand sanitisers, gloves, antiviral drugs, ventilators, medical supplies, and vaccines.
Following the disbursement of the fund, the chemical and pharmaceutical products sub-sector of manufacturing, for instance, grew almost triple fold from 3.91 percent in the first quarter of 2021 to 9.24 percent in the second quarter of the same year, the latest gross domestic product (GDP) report released by the Nigeria Bureau of Statistics (NBS) shows.
According to the report, the human health and social services sector almost doubled from 1.89 percent in the second quarter last year to 4.92 percent in the second quarter this year.
Godwin Emefiele, governor of the CBN, in October 2021, hinted of plans to increase the healthcare intervention fund to N200 billion due to increased demand.
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“When we started covid-19, CBN set aside N100 billion to support the healthcare sector, but upon rise in demand, we have disbursed N107.7 billion, supporting 114 healthcare projects which include medical diagnostics, pharmaceuticals, dental services, eye clinics both private and public hospital just to mention a few,” Emefiele said in October 2021, during official commissioning of the Dutchess International Hospital, the brainchild of the Reddington Hospital Group in Ikeja, Lagos.
Speaking further, he said, “we had taken up N100 million to support the sector but the monetary policy has said we should move it further up to N200 billion. We would continue to do whatever can be done to support healthcare”.
“I want to encourage our banks to lend to them and also members of our private sector community to invest, as you don’t have to be a doctor to own a medical facility,” Emefiele said.
Access Bank Plc, has listed the benefits of the CBN’s healthcare intervention fund, to include providing long-term, low cost finance to facilitate the development of the Nigerian healthcare sector.
It will improve access to affordable credit for indigenous pharmaceutical companies for expansion and to encourage compliance with the WHO Good Manufacturing Practice.
The bank said the scheme will contribute to the overall development of the Nigerian Healthcare system. It stated that the initiative was developed to provide funding to indigenous pharmaceutical companies and other organizations in the healthcare value chain to enable them increase capacity to meet the increasing demand for healthcare arising from the coronavirus pandemic.
The CBN in March 2020, issued operational guidelines for credit support to the healthcare sector for indigenous pharmaceutical companies and healthcare practitioners intending to build or expand their capacity.
In terms of working capital, the facility requires 20 percent of the average of three years of the company’s turnover subject to a maximum of N500 million per obligor. Where the enterprise is not up to three years in operation, 20 percent of the previous year’s turnover will suffice. The term loan is put at a maximum of N2 billion per obligor.
The Scheme shall be funded from the Real Sector Support Facility – Differentiated Cash Reserves Requirement (RSSF-DCRR).
Also, as part of its policy response to the COVID-19 pandemic, the CBN introduced the Healthcare Sector Research and Development Intervention Scheme (HSRDIS) to help strengthen the public healthcare system. The Scheme is aimed at achieving innovative financing of research and development (R&D) in new and improved drugs, vaccines and diagnostics of infectious diseases in Nigeria.
As contained in a circular released on the Bank’s website and signed by Yusuf Yila, director, Development Finance Department (DFD), the HSRDIS is designed to trigger intense national R&D activities in order to develop a Nigerian vaccine, drugs and herbal medicines against the COVID-19 and any other communicable or non-communicable diseases.
The grants are expected to be disbursed to biotechnological and pharmaceutical companies, research institutions for research and development of drugs, herbal medicines and vaccines for the control, prevention and treatment of infectious diseases.
It is also intended that the HSRDIS will boost domestic manufacturing of critical drugs and vaccines to ensure their sustainable domestic supply and reduce manufacturing costs of the drugs, herbal medicines and vaccines in Nigeria.
The Scheme which will be funded from the Developmental Component of the Micro, Small and Medium Enterprise Development Fund (MSMEDF) provides a grant limit for research activities to a maximum of N50 million while development/manufacturing activities will receive up to N500 million. Disbursements will be made to beneficiaries in tranches subject to approved milestones achieved, the CBN said in its update.
The objectives of the Scheme will among other things include; providing grants for R&D in new or revalidation of drug molecule, phytomedicines and vaccines for the control, prevention and treatment of infectious diseases in Nigeria; boosting domestic manufacturing of validated drugs (Active Pharmaceutical Ingredients or APIs), herbal medicines and vaccines for the control, prevention and treatment of infectious diseases in Nigeria, thus reducing the nation’s dependence on other countries for these drugs and vaccines amongst others.
Also contained in the Guidelines are information on eligible research and development activities, research and development timeframe and modalities.
Emefiele said medical tourism put a huge strain on the country’s foreign reserves and more importantly, for every $1 billion allocated to medical treatment abroad, there is less than $1 billion that could be available to other critical sectors of the economy.
Fidelis Ayebae, chairman, Pharmaceutical Manufacturers Group of Manufacturers Association of Nigeria (PMG-MAN) confirmed to BusinessDay last year that the majority of the group member companies that met the loan requirement received it.
Speaking further about the initiative and implementation, Ayebae said members yet to access it were working with the commercial banks with which they have a relationship to close up documentation gaps before proceeding to the CBN.
