Nigeria’s pharmaceutical industry, comprising of 101 registered members with investment worth N300 billion on Tuesday urged the Central Bank of Nigeria (CBN) to review the moratorium for the N100 billion healthcare intervention fund to two years from one year that was stated in the guideline for accessing the facility.
This will help to compensate for the delay in sourcing foreign exchange (FX).
In its communique on 25th March, the CBN announced the setting up of a N100bn credit support fund targeted at the healthcare sector. The fund would provide working capital loans as well as term loans to healthcare players to support expansion activities, research and similar activities.
The loans would come at interest rates of 5% p.a. till 28th February 2021 and climb to 9% p.a. for the rest of the loan duration.
Mazi Sam Ohuabunwa, president, pharmaceutical society of Nigeria said the major challenge of the industry was availability of foreign exchange.
Ohuabunwa appealed to CBN to make a special allocation for all those who are beneficiaries of the facility to be given oreign exchange (forex) to import what is needed to boast their capacity.
He also asked for elongation of the moratorium which is perhaps the easiest thing for CBN to do or reducing the rate.
According to him, instead of one-year moratorium, CBN can give two- year moratorium and maybe extend the repayment further down the line.
Already, 15 operators have so far accessed the fund and 15 applications are waiting for approval of the Apex bank.
Ohuabunwa explained that the industry is having difficulties in converting the money to dollar purchase equipment because of foreign exchange problems.
He spoke on ‘Nigeria’s Manufacturing Sector and CBN N100bn healthcare intervention fund: opportunities, challenges and post Covid-19 expectations’, at a Webinar organized by Finance Correspondents Association of Nigeria (FICAN) in Lagos.
Mazi said the duo of rising inflation and high level of depreciation of Naira are major threat to proper utilization of the fund and ability to generate money to pay back.
Also speaking, Fidelis Ayebae, Chairman, pharmaceutical sector of the Manufacturers Association of Nigeria (MAN) corroborated with Ohuabunwa to say non availability of FX is a major challenge confronting the industry.
Ayebae raised concerns over policy somersault, saying the FX policy on third party will not work in this country as it is hampering the activities of the sector.
The CBN on August 24, 2020, directed all authorised dealers to desist from opening of Forms M whose payment are routed through a buying company/agent or any other third parties.
“Products of manufacturing industry will continue to drop if that policy is not amended. We inflict pain and death on industries that are not even sufficient,” Ayebae said.
He warned that if that policy continues till the end of the year, it would affect the industry to the point of laying off workers.
Another policy somersault he mentioned was on Value Added Tax (VAT). He called for de-emphasis on tax, levies and other fees for the industry.
He called on the CBN to create a specialized bank like the manufacturing finance bank, infrastructure bank, derivative agriculture bank among others that would cater to the financial needs of the industries.
He said there is no way the industries can be profitable when they access commercial loans at between 25 and 30 interest rate.
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