Forex scarcity made pharmaceutical multinationals exit Nigeria – PMG-MAN

The Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN) on Sunday bemoaned the paucity of foreign exchange in the country, saying it had negatively affected the local pharmaceutical industry.

They attributed fluctuations in forex as a major reason for the exit of some pharmaceutical multinationals from Nigeria.

NAN reports that the group raised the concerns at a news conference in Lagos on the forthcoming 7th Edition of the Nigeria Pharma Manufacturers Expo (NPME) billed to hold on September 4 and September 5.

Some multinational pharmaceutical companies, including GlaxoSmithKline and Sanofi Nigeria Ltd, exited the country within the past one year.

GlaxoSmithKline (GSK) discontinued operations in Nigeria in August 2023, ending its 51-year existence in the country, while French pharmaceutical manufacturing company, Sanofi, exited Nigeria in November.

The Chairman, Local Organising Committee (LOC), NPME 2024, Mr Patrick Ajah, said that for the domestic pharmaceutical industry to progress, a stable exchange rate was essential.

Ajah, a Pharmacist and the Managing Director of May & Baker, said that many companies were also on standby for the implementation and take off of the recently announced Executive Order.

Recall that on June 29, President Bola Tinubu signed an Executive Order removing tariffs and Value-Added Tax (VAT) on pharma imports.

The order introduced zero tariffs, excise duties, and VAT on specialised machinery, equipment and pharmaceutical raw materials to bolster local production of essential healthcare products.

The order has yet to take effect.

Ajah said: “Unless the value of Naira is fixed, achieving the country’s target of 70 per cent in local drug manufacturing will remain a mirage.

“The government will need to do certain things to achieve 70 per cent local drug production.

“The recent fluctuations in the value of the Naira have made it difficult for companies to plan and invest.

“This is one major reason why multinational companies are leaving. It’s not the fear of subsidy removal.

“If we didn’t tamper with the currency, all the multinational companies would be here and they would still be making more investments.

“But, if somebody brought his money, when they were bringing the money, all the money from outside by multinational companies would have to go through the banking system.

“I’m telling you because I was involved in it.

“And when it gets through the banking system, it will be at an official rate.

“So, you brought in money to come and build a facility at the exchange rate of N316, and now you’re going to be remitting the money at N1,500 and something, and you can’t even find the dollar.

“Many companies will not be able to cope. So fixing our exchange rate is going to be the one single thing that will immediately reset where we are.”

Ajah called for increased government support for the local pharmaceutical industry.

According to him, with the right support, Nigeria can produce 70 per cent of the medicines it consumes.