The Pharmaceutical Society of Nigeria (PSN) has called for dedicated allocation of foreign exchange to healthcare/pharmaceutical industry so that they can procure their machinery/equipment and raw materials in a timely manner.
In a statement issued by the society’s President, Pharm (Mazi) Sam Ohuabunwa, the PSN noted that while some pharmaceutical companies that applied for the special 100 billion CBN facility had been granted, it is distressed that majority of the applicants are yet to be successful.
The society, therefore, called for the expedition of the review and approval of many of the outstanding applications so that the overall impact on industrial capacity, capability and output will be significantly enhanced in line with the noble objectives of the facility.
The PSN also lamented that many of the beneficiary companies “are experiencing tremendous difficulties” in accessing foreign exchange to pay for the machinery and equipment in order.
It stated that the development has forced many of them to source forex from sundry sources at much higher rates than the official CBN rate, adding that the impact of this “portends grave danger and may undermine the noble objectives.”
“The Pharmaceutical Society of Nigeria ( PSN) has noted with pleasure that some Healthcare/ Pharmaceutical Companies that applied for the special 100 billion CBN facility have been granted. Nevertheless, we are distressed that the majority of the applicants are yet to be successful,” the statement said.
“We are therefore asking for the expedition of the review and approval of many of the outstanding applications so that the overall impact on industrial capacity, capability and output will be significantly enhanced in line with the noble objectives of the facility, especially as COVID-19 pandemic subsists and the need for self-sufficiency in local drug production persists.
“Again, the feedback we receive is that many of the beneficiary companies are experiencing tremendous difficulties in accessing foreign exchange to pay for the machinery and equipment in order. Many are compelled to source forex from sundry sources at much higher rates than the official CBN rate. The impact of this portends grave danger and may undermine the noble objectives.
“First the longer it takes to get the machines and equipment in, the longer it will be for Nigeria to begin to see an enhanced local production. Second, the longer it takes, the more difficult it will be for the benefitting companies to begin production and generate cash flow to meet the interest and repayment obligation, as the moratorium is fast depleting. Third is that with forex at rates higher than the planned or forecasted rates in the business plan, the money received in Naira may no longer be sufficient to meet the stated needs. And fourth is that the longer the Naira is left in the Banks awaiting piecemeal allocation of Forex, the faster the value depreciates by growing inflation and the fewer the number of machinery and equipment or even raw materials that can be bought. All these will put an additional burden on the beneficiary companies when it comes to servicing the loans in a timeous manner.
“It is because of the foregoing and to preempt any future problems with prompt servicing of the loans that we make this special appeal to the CBN to consider making the special and dedicated allocation of foreign exchange to the beneficiary companies so that they can procure their machinery/equipment and raw materials in a timely manner, in order, that the beneficial effect of this noble program can be quickly realised and repayment made as and at when due so that the CBN will be encouraged to do more for the Pharma Industry and also to other sectors of the economy.
“Ideally one would have wished that the loans were granted in two currencies: Foreign currency for equipment purchase and local currency for local purchase (information available in the applications and business plans of beneficiaries). This would have obviated the current challenges being faced by the beneficiary companies.
“Given the current and well-acclaimed responsiveness of our CBN leadership, it’s our hope that the CBN will accede to our request and help the industry to quickly optimize this earnestly prayed- for and long-awaited LIFELINE.”