The Pharmaceutical Society of Nigeria has appealed to the Central Bank of Nigeria for a special and dedicated forex allocation to pharmaceutical companies to enable them to procure equipment, raw materials and service loans on time.
While thanking the CBN for the N100bn facility granted to pharmaceutical and health companies, the President of PSN, Sam Ohuabunwa, in a statement made available to Financial Street, 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.”
He lamented that “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,” adding that “many are compelled to source forex from sundry sources at much higher rates than the official CBN rate.”
He further said, “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 forex allocation, 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.”
According to him, it is necessary to be timely with the grant so that the beneficial effect of the programme could be quickly realised and repayment made when due so that the CBN would be encouraged to do more for the pharma industry.
“Ideally, one would have wished that the loans were granted in two currencies: the foreign currency for equipment purchase and local currency for local purchase. This would have obviated the current challenges being faced by the beneficiary companies,” he explained.
