Victor EzejaThe Centre for the Promotion of Private Enterprise (CPPE), has commended President Bola Tinubu’s government for the recent Executive Order waiving taxes such as import duties, VAT, and excise duties on pharmaceutical raw materials, intermediate products, medical diagnostic equipment and machineries.
According to a statement by Coordinating Minister of Health and Social Welfare, Prof. Muhammad Ali Pate, the Executive Order was aimed at increasing local production of healthcare products (pharmaceuticals, diagnostics, devices such as needles and syringes, biologicals, medical textile, etc.).
Join our WhatsApp ChannelAli Pate explained that the Order “introduces zero tariffs, excise duties and VAT on specified machinery, equipment and raw materials, aiming to reduce production costs and enhance our local manufacturers’ competitiveness.”
Specified items in the Order, according to the health minister, include Active Pharmaceutical Ingredients (APIs), excipients, other essential raw materials required for manufacturing of crucial health products like drugs, syringes and needles, Long-lasting Insecticidal Nets (LLINs) and Rapid Diagnostic Kits, among others.
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The Order, which mandated collaboration between the Ministers of Health, Finance, and Industry, Trade and Investment to develop a Harmonized Implementation Framework to reduce bottlenecks equally directed agencies including the Nigeria Customs Service, National Agency for Food and Drug Administration and Control (NAFDAC), Standard Organisation of Nigeria (SON), and Federal Inland Revenue Service (FIRS) to ensure swift implementation of Executive Order, with special waivers and exemptions effective for two years.
Reacting to the news, CPPE in a statement by the CEO, Dr Muda Yusuf, said such “fiscal policy measures would boost domestic production of pharmaceutical products, reduce the cost of medications, improve access to healthcare and impact positively on the well-being of citizens.”
The Centre averred that the policy would also revitalize our pharmaceutical industries and create more jobs.
The economic think tank called on Tinubu’s government to extend a similar gesture to other sectors of the economy including agriculture, energy, Iron and steel to boost production.
It stressed that if properly deployed, fiscal policy measures are better in tackling the challenges in the economy caused mainly by supply side issues.
CPPE explained that “Boosting production is very vital to fixing the current inflationary pressures, driven largely by supply side challenges in the economy.
“Fiscal policy measures are potent tools for the realization of this objective.
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“We recommend that these fiscal policy measures should be replicated to boost production in other segments of the real sector.
“We need similar executive orders for agriculture, agrochemicals and Agro-allied industries to curb the surging food inflation; we need similar intervention in the energy sector, to promote energy security and incentivize private investments in the sector; there is need for similar support for Iron and steel sector to aid the construction industry and reduce construction costs for housing and infrastructure.”
It further stated that fiscal policy protection is also needed to support domestic investments in petroleum refineries to reduce pressure on foreign exchange, create jobs, and deepen backward integration.
The Centre observed that there is a growing global concept of “economic nationalism” which centres around boosting domestic production to support the national economy and that the federal government should key into that objective by doing everything possible to strengthen domestic production capabilities across all sectors.
While noting that fiscal policy measures have over time proven to be more impactful on real sector performance than monetary policy, the Centre underscored the need for the real sector of the economy to be effectively protected and incentivized to improve production and ensure sustainable investments.
“We need to stem the tide of deindustrialization of the Nigerian economy, the exit of foreign direct investors and the rising mortality rate of domestic industries,” it said.
The centre expressed optimism that stepping up such fiscal policy interventions would enhance the realisation of the objective of scaling up production, but the country must be ready to trade off some revenue in the short term. “The economy would be better off in the medium to long term, with regard to growth in domestic production, less import dependence, heightened prospects of disinflation, higher job creation and better economic resilience,” it further stated.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
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