The Nigeria Employers’ Consultative Association has praised the Federal Government for issuing a new Executive Order establishing zero tariffs, duties, and value-added tax for pharmaceutical products.
It was revealed on Friday that President Bola Tinubu had signed an Executive Order introducing zero tariffs, Excise Duties and VAT on some pharmaceutical raw materials and specialised pharmaceutic machinery and equipment to boost the production of essential healthcare products in the economy, according to The Punch.
In a statement, NECA said the Executive Order came at a time when local pharmaceutical companies were facing an almost existential challenge, an acute shortage of raw materials, high production costs, and low output in recent years due to the high cost of importing productive machines and other input materials.
The Director General of Nigeria Employers’ Consultative Association, Mr Adewale-Smatt Oyerinde, commended the President for signing the Executive Order, saying, “The quick and timely implementation of the Order would provide a leeway out of the current cost challenges and allow the sector to rebound. The huge cost challenges facing the sector due to the depreciation of the Naira has generally increased the cost of import of input materials and the attendant clearing charges.”
The NECA DG stated that approximately 50% of raw materials utilized in the pharmaceutical business are imported, notwithstanding the volatility of the Naira, import tariffs, and other expenses.
Oyerinde highlighted that these charges add to the sector’s high cost of manufacturing and inflated pharmaceutical product prices, resulting in an increasing inventory of unsold items and a low contribution to GDP.
According to the National Bureau of Statistics, the sector contributed 0.25 percent and 0.26 percent of real GDP in 2022 and 2023, respectively, while an industry assessment estimated that the inventory of unsold pharmaceutical products was N79 billion in 2022.
Oyerinde stated that effective monitoring and engagement with stakeholders would ensure its success.
“We note with concern the fate that has bedevilled many other Executive Orders. We hope that greater efforts will be put into making the new order work for the benefit of the industry and Nigerians in general,” he concluded.
