In addition to the executive order exempting specified pharmaceuticals from tariffs and excise duties to reduce production costs, Nigeria’s pharmaceutical operators have urged the government to improve access to financing and promote collaboration with the private sector to address the bottlenecks in the industry.
This call was made during an interactive session on “Is the Market Ready for Increased Local Manufacturing of Medicines?” at the ongoing Nigeria Economic Summit on Monday in Abuja.
The operators highlighted that limited access to affordable loans and credit facilities has hindered the growth of local pharmaceutical companies as many firms struggle to upgrade infrastructure, expand production capacity, and meet regulatory standards, leading to higher production costs and limited availability of essential medicines.
In addition to financing, the stakeholders emphasised the importance of forging public-private partnerships (PPPs) to address existing gaps in healthcare infrastructure and supply chains.
They suggested that collaborative efforts could accelerate the distribution of locally produced medicines, facilitate technology transfer, and improve research and development.
Funke Falade, consultant, Nigeria Sovereign Investment Authority (NSIA) expressed concern over the sector’s minimal contribution to the economy, noting that pharmaceutical manufacturing accounted for less than a percentage of GDP in 2023.
She warned that despite Nigeria’s growing population, the country might lack the capacity to meet future pharmaceutical demands without adequate financial support and infrastructure upgrades.
Read also: High imports, port congestion, others clog local pharmaceutical production —Experts
“Access to finance remains a key challenge,” Falade said.
“Infrastructure is becoming rapidly dilapidated, the throughput of regulatory processes, foreign exchange crisis”, she added, saying that many manufacturers are producing below scale because of their inability to meet the challenges.
Falade recommended that the Presidential Unlocking Healthcare Value-Chain Initiative (PUHVCI) could bridge these gaps by connecting industry operators with relevant institutions to provide affordable financing and technical support. “This is an opportunity Nigeria needs to seize,” she added.
Raphael Ajayi, head of supply chain at Fidson Healthcare Plc, noted that almost 100 percent of the industry’s manufacturing inputs are imported, making local production heavily reliant on foreign exchange and vulnerable to fluctuating interest rates.
“Almost 100 percent of our manufacturing inputs are imported and we depend on import. The high cost of funds and interest rate hikes make it difficult,” he said.
Ajayi also urged for a more enabling regulatory environment that can support local manufacturing such as easing bottlenecks in registration of products.
He further highlighted logistics issues, including port congestion and inadequate infrastructure, such as non-functional scanners, which delay the clearance of medical supplies.
Mary Ameh, director of warehousing and distribution, Chemonics International, Nigeria on the USAID GHSC-PSM Project, stated that PPP is key as the government could leverage the funding and expertise available in the private sector.
She added that PPP could boost investment in warehousing and distribution infrastructure which she noted is a huge market.
Abiodun Oyenuga, project lead at Bill & Melinda Gates Foundation emphasized that PPP is key for collaborative planning and perfect for driving technology and innovation in the sector.
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