The President, Pharmaceutical Society of Nigeria (PSN), Pharm. (Mazi) Sam I. Ohuabunwa has called on the Federal Government of Nigeria to allocate foreign exchange to the pharmaceutical industry, so that manufacturers can make timely purchase of their equipment and raw materials.
Ohuabunwa, who made the call in a recent press release, expressed concern that while some pharmaceutical companies that applied for the special 100 billion CBN intervention facility had been granted, the majority of the applicants were yet to be successful.
He therefore called for an accelerated review and approval of the outstanding applications, stressing that, in doing so, the overall impact on industrial capacity, capability and output will be significantly enhanced in line with the noble objectives of the facility.
The PSN head also lamented that many of the beneficiary companies were having difficulty in accessing foreign exchange to facilitate their operations.
According to him: “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.”
Ohuabunwa explained further that the longer it takes for the pharmaceutical manufacturing companies get machines and equipment in, the longer it will be for Nigeria to begin to see an enhanced local production.
He added that such delay will also make it difficult for the benefitting companies to begin production and generate cash flow to meet the interest and repayment obligation, stressing that “the moratorium is fast depleting.”
Ohuabunwa said: “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. Also, 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.”
The PSN boss also state that it would have been more preferable for the loans to be granted in two currencies – foreign currency for equipment purchase; and local currency for local purchase, adding that 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 is our hope that the CBN will accede to our request and help the industry to quickly optimise this earnestly prayed- for and long-awaited lifeline,” Ohuabunwa urged.