Pharmaceuticals demand Domestic Preference Policy implementation

Due to lack of patronage of locally made drugs, pharmaceutical firms are demanding the implementation of the Domestic Preference Policy of the Public Procurement Act of 2007, Real Sector Watch has gathered.

The Domestic Preference Policy of the Public Procurement Act of 2007 mandates government ministries, departments and agencies (MDAs) to patronise locally made drugs rather than those from outside the country.

But this is not happening at a large-scale as MDAs prefer to import many of their needed drugs, even though locally made products meet international standards, as evidenced in the recent World Health Organisation’s (WHO) certification of four local firms.

It was gathered that even when MDAs choose to patronise local firms, they still owed them outstanding debts.

Pharmaceuticals, under the umbrella of Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PG MAN), recently wrote a letter to their parent organisation, MAN, urging it to prevail on the Federal Government to implement the policy.

“The group expressed distress on the huge domestic debts owed manufacturers and other suppliers by various MDAs,” MAN says.

The group also requested special duty consideration on some pharmaceutical raw materials and inputs as the Common External Tariff (CET) across 15 West African countries beckons.

Similarly, members of the Association of Food, Beverage and Tobacco Employers (AFBTE), during its visit to Frank Jacobs, president, MAN, say they are burdened by over-regulation by regulatory agencies, stressing that this puts more pressure on cost of production and doing business.

Members of the group were also unhappy over why the Federal Government decided to double Value Added Tax (VAT) on manufactured goods, such as packaged water and water in pet bottles.

“The increase on VAT would have economic and social consequences on the economy as the masses will be compelled to bear the burden of the resultant increase in production cost,” the group says.

Furthermore, members of the group criticised government’s proposal to make manufacturers solely responsible for implementation of its policy on ‘Extended Producers Responsibility,’ while suggesting that this should be on tripod basis as obtained in South Africa and other countries.

Poor patronage of locally made products is a serious issue that must not be wished away, say experts. Industry analysts attribute it to poor perception of made-in-Nigerian products by country’s consumers.

Already, some local manufacturers are branding their products ‘made in Asia or Europe’ in order to sell their products or make more margins.

The implication of this is that many of these products are not captured as locally manufactured goods in the Gross Domestic Product (GDP) calculation, experts say.

The practice is common among companies owned by Asians, particularly those making ceramic tiles, iron and steel, cosmetics and food products. It is also a common practice among footwear makers, especially those in Aba, the commercial city of Abia State.

“It is about the attitude of Nigerians who believe that anything made in this country is inferior, which is unfortunate,” said Jacobs recently in response to questions.

“This attitude could drive unscrupulous manufacturers to brand their products ‘made-in-Britain’ as a market gimmick to impress upon consumers that this is a foreign product. But this is an unscrupulous practice because it tends to deceive the consumer,” Jacobs, who is also the CEO of Jacobs Wines, said.