Despite the problems facing manufacturers in the Nigeria pharmaceutical industries and the difficult environment they operate, experts in the industry are still optimistic, saying that the sector needs urgent strategic reform in Foreign Direct Investment (FDI) to regain its place among peers.
Speaking at the monthly lecture titled, ‘The Business Environment and Economic Outlook of the Nigerian Pharmaceutical Sector 2019’ organised by the Association of Industrial Pharmacist of Nigeria (NAIP), these experts lamented that Nigeria needs to deepen the foreign exchange financing by building up precautionary foreign reserve holding to level that will strengthen the Naira enough to protect store of value attribute of the currency.
“A weak currency not only makes financial system fragile, it precipitates instability and undermines growth and the government lack enough money to stimulate the economy,” said Ayo Teriba, chief executive officer CEO, Economic Associates.
According to Teriba, up to the early nineties, Nigeria had a larger stock of FDI than India, South Africa or the United Arab Emirates, but they have since overtaken Nigeria, with India now having more than triple, and Saudi Arabia having more than double, Nigeria’s FDI stock.
“Nigeria must join the liquidity race and regain its place among peers, the main weakness over the years is that low levels of foreign reserves leave the system uninsured against external financial shocks, weakens the Naira exchange rate, and makes assets denominated in Naira poor stores of value and wealth .Nigeria needs to wake up,” economist said.
Ignatius Anukwu, chairman NAIP alarmed on Nigeria re-strategising the deteriorating access to foreign exchange to import the Active Pharmaceutical Ingredient (APIs) for smooth operation of pharm manufacturers.
“About 70 percent of drugs are been imported to Nigeria with finished goods and then we manufacture there in the country about 30 percent. We heard some experts saying naira maybe devalued a little bit. Whatever happens to exchange rate is going to hit the industry very hard, if we are having difficulty accessing Forex, it is going to be a very big challenge for us,” he said
The NAIP chairman added that the government need to help enhance more manufacturing to happen in the sector by moving it from the 30 percent to 70 percent that the national drug policy is aiming.
Anukwu therefore noted that many Nigerians still pay out of pocket for their medicine as the NHIS is yet to capture enough citizens to the scheme, urging that the country should look at how to progress in the next years by growing with increasing percentage shift in manufacturing.
Speaking on Economic contribution, Moses Tule Director, Monetary Policy Department, Central Bank of Nigeria said the Chemical and Pharmaceutical sub-sector is recorded under the manufacturing sector in Gross domestic product (GDP) computation.
“The chemical and pharmaceutical subsector contribution to the overall GDP has been less than 1.00 percent, since 2016, the manufacturing sector has contributed below 10 percent of the total GDP,” Tule pointed out.
However, Fidelis Ayebae CEO of Fidson Health Care Limited said many pharmacists now struggle to be salesman, urging for a favorable government policies to encourage setting up of pharmaceutical industries and sustaining those already existing.
“Government needs to make the right investment to stimulate the economy and reduce unemployment rate,” Sam Ohuabunwa, President of Pharmaceutical Society of Nigeria (PSN) added.