Victor EzejaMr Cyprian Orakpo, CEO of Transgreen Nigeria Limited, manufacturers of O-Care Disposable Syringes and Face Masks, has called for speedy implementation of the Nigerian Government’s Executive Order on imported pharmaceutical inputs.
This, he said would help to promote ease of doing business in the area of local manufacturing of pharmaceutical products.
Join our WhatsApp ChannelIt would be recalled that President Bola Tinubu had in June 2024, signed an Executive Order to introduce zero tariffs, excise duties and value added tax (VAT) on imported pharmaceutical inputs.
This, according to the coordinating minister of health and social welfare, Prof. Muhammad Ali Pate, was aimed at revitalising the Nigerian health sector and increasing local production of healthcare products to reduce costs.
The Executive Order has been applauded by various stakeholders for its potential benefits.
However, eight months later, the implementation is yet to kick off, leaving many manufacturers in the sector who have set plans to utilize the opportunity to boost in-country production capacity disappointed.
Speaking during his appearance on the Channels Television breakfast programme, Morning Brief, on Tuesday, 18 March, Mr Orakpo, said the challenge in Nigeria is lack of synergy between the formulation of policies and implementation.
Orakpo, who is also the vice chairman of Manufacturers Association of Nigeria (MAN), Apapa, branch Lagos, said there should be synergy between framing of policy and implementation.
He said the Executive Order on tax waiver for import of pharmaceutical inputs took about four months for it to be gazetted, and eight months later, the federal government is yet to release the implementation guideline.
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“There is need for synergy between formulating policies and implementing them. This policy (Executive Order on Pharmaceuticals) is an excellent policy,” Orakpo stated.
Highlighting the effect of the delay in the implementation of the Executive Order, Orakpo said many investors who took the opportunity to invest in importation of food and pharmaceutical products inputs were disappointed when their consignments arrived as they were made to paid old tariff coupled with much spending on demurrage at the ports because the guideline for implementation is not yet out.
The entrepreneur emphasised the need for synergy between government ministries, departments and agencies that have critical roles to play in the implementation of the Executive Order.
“The issue is much more than having good policies, there must be a synergy between the government ministries in the area of pharmaceutical products. Basically, you have the Ministry of Health, Ministry of Trade, Industry and Investment, Ministry of Finance, and the Customs. These four suppose to come together and come out with the implementation guideline, but eight months down the line, it is not yet out,” Orakpo stated.
Access To Finance as a Challenge to Boosting Local Manufacturing
Speaking on the ease of doing business in Nigeria, particularly in the area of manufacturing, Orakpo said access to finance is the biggest challenge. He mentioned how he was unable to float a business of manufacturing floor tiles in Nigeria because he couldn’t raise $50 million capital that was required at the time and the business is now dominated by foreigners who could afford to raise cheap funds overseas to finance it.
He said the Nigerian government has through the Bank of Industry (BOI), provided funds that local manufacturers could access but the BOI needs bank guarantee which requires that a commercial bank will provide it and that’s where the problem lies.
According to him, commercial banks usually ask for about 120 to 140 per cent asset coverage of what they are guaranteeing to the manufacturer. This, he said has been a challenge for many manufacturers across sectors of the economy.
The entrepreneur recently unveiled a new factory, first of its kind in Lagos, for the production of disposable syringes both for local distribution and export.
Narrating his experience while trying raise capital to start the business, Orakpo stated that after financing the assets, the company visited various traditional banks to get bank guarantee to access funds from BOI for working capital, but didn’t get any positive response until a new generation bank, Premium Trust Bank, came to its rescue.
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.
