Will CBN palliative measures spike innovation in pharmaceutical industry?
The Central Bank of Nigeria (CBN), in its move to alleviate the challenges faced by players in the private sector, has opened intervention programmes to support the business community.
The apex bank particularly opened loans to the pharmaceutical industry in order to help them expand or establish drug manufacturing plants in the country.
Apart from N50 billion, the CBN also announced a N1.1 trillion stimulus package that would include loans to support the manufacturing sector to enable players recover from the impact of the virus.
The question that many industry watchers ask is, will the intervention fund spur more innovations in the pharmaceutical industry?
A lot of innovations have gone on in the local pharma industry.
Juhel, an Awka, Anambra State-based drug maker, recently unveiled its new Oxytocin injection for pregnant women, the first of its kind in Africa.
Drugfield Pharmaceuticals Limited also came up with Chlorhexidine gel, which caters for the umbilical cord. It is one of the World Health Organisation(WHO)’s requirements for child care.
Similarly, SKG Pharma has locally produced Amino Acid and Vitamins, first in Africa. Moreover, Daily Need Industries has produced Amoxicillin Dispersible Tablets (DT), used for the cure of Pneumonia. Also, May &Baker entered into a joint venture project with Federal Government to produce vaccines locally. It was gathered that the drug maker and FIIRO entered into an understanding for the commercialisation of a sickle cell supplement produced by the institute.
One industry watcher said he expected the funds to enable the industry produce more of hand sanitizers and face masks.
Umeh Frank, a media owner based in Enugu, said he expects the industry to start research around covid-19.
“They need to show that Nigeria has the capacity to provide solutions to global health problems,” he said.
A chief executive of a pharmaceutical firm, however, said the industry consistently needs an intervention funds to scale.
Covid-19 has infected over 150,000 people across the world and 12 people in Nigeria have contracted it already.
Nigerian pharmaceutical companies have faced various challenges ranging from foreign exchange shortages to poor access to credit. Capacity utilisation in the industry sits at 47 percent, according to Manufacturers Association of Nigeria (MAN).
The pharma industry grew its revenue by 12 percent in 2018, which represents a decline of 11 points from 23 percent achieved in 2017.
An industry article by McKinsey & Company themed, ‘Winning in Nigeria: Pharma’s Next Frontier’ states that the Nigerian pharmaceutical industry has the potential to contribute significantly to the economy. But it stresses the need to build infrastructure to support the industry.
“The value of the Nigerian pharma market could rise by as much as nine percent a year over the next 10 years to reach $3.6 billion by 2026 (exhibit), making it as large as the South African market today,” the report says.
“Over the same period, Nigeria could contribute between $1.9 billion and $2.2 billion to pharma sales growth, 55 percent of it from prescription drugs,” it adds.