Posted on: Tue 02-07-2024

Nigeria Employers Consultative Association, NECA, has lauded President Bola Tinubu’s new executive order on zero tariff, excise duty and Value Added Tax, VAT, for pharmaceutical raw materials, machinery and equipment, saying the sector can now breathe.

In a statement, NECA’s Director-General, Mr. Adewale-Smatt Oyerinde, urged quick and timely implementation of the Order to provide a leeway out of the current cost challenges and allow the sector to rebound.

According to NECA, “To boost activities in the pharmaceutical sector, President Bola Tinubu signed an Executive Order introducing zero tariff, Excise Duties and Value Added Tax, VAT, on some pharmaceutical raw-materials and specialized pharmaceutic machinery and equipment to boost the production of essential healthcare products in the economy.  

“The Executive order came at time that local pharmaceutical companies are facing an almost existential challenge.  The sector has been beset with acute shortage of productive raw-materials, high cost of production   and low output in recent years due to high cost of import of productive machines and other inputs materials.”

NECA, commended the President for signing the “Executive Order, which allows for Zero tariff, duties and VAT on pharmaceutical raw materials, machinery and equipment.

“The quick and timely implementation of the Order would provide a leeway out of the current cost challenges and allow the sector to rebound.

NECA “Observes  with dismay the huge cost challenges facing the sector as a result depreciation of the Naira, which generally increased cost of import of input materials and the attendant clearing charges.

“About 50 percent of raw-materials used in the pharmaceutical sector is imported, notwithstanding the unfavourable Naira parity, import duties and other charges.  

“These costs add to high cost of production in the sector and inflated pharmaceutical products prices, which account for increased inventory of unsold goods and low contribution of the sector to GDP.  

“According to NBS report, the sector contributed 0.25 percent and 0.26 percent to real GDP in 2022 and 2023 respectively, while inventory of unsold pharmaceutical products stood at N79 billion in 2022 according to industry report.”

While urging a timely and religious implementation of the Executive Orders to avoid the fate that has befallen other Executive Orders, Mr. Wale-Smatt noted that “deft monitoring and engagement with stakeholders would ensure the successful implementation of the Orders. We note with concern the fate that has bedeviled may other Executive Orders. We hope that greater efforts will be put into making the new Orders work for the benefit of the industry and Nigerians in general.”

SOURCE: VANGUARD NEWSPAPER

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