Who will save dying pharmaceutical firms?

The Nigerian pharmaceutical industry is gradually dying. The imminent death of this sector arises from the ill-advised Common External Tariff (CET) regime, which places zero duty on imported finished drugs but imposes between five and 20 percent tariffs on raw and packaging materials.

This sector is also being asphyxiated by the foreign exchange regime as a large chunk of its raw and packaging materials are imported, owing to the absence of viable petrochemical industry and the inability of successive governments to create an enabling environment that would attract intermediate investors.

However, industry players say the greatest threat to this sector now is the CET regime, which has made imported drugs 10 to 30 percent cheaper than locally manufactured drugs.

Countries in the Economic Community of West African States (ECOWAS) recently agreed to implement the CET, which guarantees uniform tariff across the West African region. While this trade arrangement can spur the region’s employment generation and industrial growth, it has thrown up a clear downside, having opened a door to unbridled drug importation into Nigeria, making traders smile to the bank to the detriment of local manufacturers.

Managers of major pharmaceutical firms in the country, who spoke with Real Sector Watch over the weekend, raised an alarm that local drug firms were now, consistently, losing contract bids to importers, stressing that this could negatively affect their margins when the financial statements/results would be released.

Okey Akpa, president, Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN), told Real Sector Watch that this could destroy over N300 billion investment made by industry players and result in one million Nigerian employees in direct and indirect employment losing their jobs.

Akpa, who is also the chief executive of SKG Pharma Limited, said it was unfortunate that Nigeria could not protect its vital industry at a point when the country was talking about diversification in the face of dwindling oil prices.

The PMG-MAN helmsman wondered why Nigeria, which was always imitating other countries, could not learn that China, India and several other countries in Europe and America closed their economies when their development was at an inchoate stage.

“China closed its economy until it was ready. India and the United States closed their economies until they were ready. Why can’t we do the same here?,” Akpa asked.

At the dialogue between ECOWAS and Nigerian drug makers in Ikeja, Lagos, Fidelis Ayebae, managing director/chief executive officer, Fidson Healthcare plc, said given the level of unemployment in the country it would be a grand disaster for the pharmaceutical industry to collapse.

Kunle Ekundayo of Drugfield Pharmaceuticals Limited said with this situation, Nigeria was paying for the labour of other countries while dragging its citizens into joblessness.

In a recent interview with Real Sector Watch, William Awinador-Kanyirige , Ghana High Commissioner to Nigeria, said Ghana was yet to implement the CET.

This was earlier confirmed by Ernest Bediako, chief executive of Ernest Chemist in Ghana, who said that raw and packaging materials’ importation was still zero percent in the country.

Industry players wonder why Nigeria was in a hurry to kick-start the CET without looking at all sides to the trade agreement, asking the minister of industry, trade and investment to intervene to save this critical sector from collapse.

ODINAKA ANUDU