Export of Nigerian pharmaceutical firms has fallen by 91 percent in four years, signifying the need to fix the sub-sector.
In 2014, the industry earned $7.708 million from export of medicines to the African market, according to the International Trade Centre (ITC).
Four years later, however, the industry grossed only $708,000, representing a 91 percent fall. Naira has weakened from N199/$ in 2014 to N360/$ in 2018 (80.9 percent), but export earnings fell by 91 percent.
The African Continental Free Trade Area (AfCFTA) is the biggest story at the moment as Nigeria becomes a signatory of the trade treaty. Firms that cannot compete in the upcoming trade regime will go out of business, experts say.
“This industry is yet to be competitive. If it’s not competitive, then it is set to face challenges when you throw it open to initiatives such as the African Continental Free Trade Area (AfCFTA), which is going to enlarge the market a lot more,” Okey Akpa, chief executive of SKG Pharma Limited, said in an interview with BusinessDay in Lagos.
He said the biggest issues in the sector are absence of petrochemical industry and poor infrastructure.
“We need to have a petrochemical industry that will substitute what we are presently importing. It is a sector with a big potential, but this is largely unrealised because of lack of petrochemical industry,” he said.
“If you look at the volume of paracetamol powder being imported into this country, you will see that we have no reason for not having a local plant here,” he added.
He stressed the need for the government to sustain the fiscal policy in the pharmaceutical sector, which limits importation of products produced locally in the required quantity.
Evans Medicals was taken over by the defunct Skye Bank and tier-one First Bank of Nigeria in 2017 over loan default. This was after the firm had obtained the sought-after World Health Organisation (WHO)’s prequalification, which gave it an opportunity to participate in international bids.
Swiss Pharma sold its assets to Biogaran-Servier in March 2017, owing to financial crisis.
Neimeth International Pharmaceuticals Plc made a loss of N139.2 million for the fourth quarter of 2018. It later posted only N5.45 million profit after tax in the second quarter of 2019. The Agbara Ogun State-based Pharma Deko suffered 36 percent drop in revenu in 2018, from N1.593 billion in December 2017 to N1.023 billion in 2018. It suffered loss after tax of N265.26 million.
The drug maker complained in its financial statement ended December 31, 2018, that the federal government placed a ban on the importation and sale of any pharmaceutical product containing codeine phosphate.
It said the ban affected the company’s sale of the flagship product—‘Parkalin Cough Syrup’.
“Local companies in the pharmaceutical industry are struggling to remain in business and some have gone into extinction. And to meet the shortfall in demand, import increases,” Gbolahan Ologunro, a research analyst at Lagos-based CSL Stockbrokers, said.
Tomisi Akinyemi, a pharmacist at HealthPlus Limited, said local pharmaceutical companies are shutting down in Nigeria while more importers coming up.
“Most people now say that they don’t want chemical drugs but herbal supplements. Demand for herbal supplements is on the increase. Now, most companies import natural herbal supplements than the chemical ones,” he said.
ODINAKA ANUDU
