Chase growth and leave inflation alone. 26.25% MPR is too high : pharmacists urged FG. 

Considering the challenges bedeviling the pharmaceutical sector where multinational corporations like GSK, Sanofi, and others have left Nigeria and their departure has left  vacuum in the industry, Chairman of a leading Pharmaceutical company in Nigeria pharm Akinjide Adeosun wants the Federal Inland Revenue Service, FIRS, to focus on only eight tax types accounting for 90 per cent of tax revenue and delete 54 tax types which are ‘impediments to business growth.

This is because, operating in Nigeria has been tough for the pharmaceutical businesses due to a demanding economic environment that includes variable exchange rates, hefty import levies, stringent regulatory processes, and bureaucratic impediments among others.

Pharmaceutical manufacturers, who stated this at the 13th Annual Symposium and Award Ceremony, organized by the Health Writers Association of Nigeria HEWAN, in Lagos, complained that, no company can function on such percentage and urged the federal government to lower the MPR to 20 percent or even less.

He said, although the federal government of Nigeria, through Central Bank, CBN, has raised the MPR to reduce the high rate of inflation, it is no longer sustainable and urged the government to focus on growth rather than inflation.

“The strategy of the federal government has been to increase MPR. Recall that inflation is when you have fewer goods being chased by plenty of money, and when that happens, you will have an increase in prices of goods, nothing that, it is a global norm that when you want to stem inflation, you must increase MPR, because once you increase MPR, lending increases, thereby mopping up excess money in circulation.

“No doubt, the governor of CBN, Mr Olayemi Cardoso is doing an excellent job since he came on board, because he has used monetary tools to manage the economy, saying that, having tried it for a year, and inflation is still high, it is better to switch “.You cannot chase growth, if manufacturers cannot borrow at a single digit,”  Adeosun

” He explained further, ” When you borrow money at an interest rate of about 38 percent to import drugs into the country, coupled with the high cost of fuel, diesel, clearing cost, import duties and levy duties (as not all drugs attract zero per cent. Import duties may be zero per cent, but levy is about 20 per cent), no business can survive “.

It is on record that Tinubu ‘s administration created a window where manufacturers can borrow between N500 million to N1 billion, at nine percent interest rate. Adeosun expressed dismay that, the fund is not accessible, as he has applied for almost two months now, but hasn’t seen anything.

Adeosun however urged the government to chase growth and leave inflation alone, adding that, “Reduce MPR (@26.25 percent) to enable commercial lending rate crash to single digit from the present over 30 percent thereby stimulating economic growth, recommending a managed float of the currency because the current N1, 500.00 to 1 USD exchange rate is not sustainable in the long term.”

He advocated  that, ” small tax payers whose businesses with annual turnover of less than N1 billion should be given Tax Holiday for one year. Medium to large tax payers should have corporate income tax (CIT) reduced from 30 per cent to 20 per cent to help cushion the shock of the operating environment. In addition, Import duty and levy should be removed to enhance the survival of the pharmaceutical sector.

” If these strategies are executed, we can tum the difficulty of stagflation into the superhighway road that will lead us into economic prosperity.” Adeosun assured

Adeosun also urged company owners to diversify if they want their companies to thrive. “Outsource non-essential parts of your business and focus on your core business. You may consider per hour or per day wage to improve productivity. Consider installing Solar panels (Expensive near term but affordable long term).This clean energy helps to preserve our ecosystem,” he advised.

Also, the National Chairman, Association of Community Pharmacists of Nigeria (ACPN), Pharm. Adewale Oladigbolu said, Nigeria do not have enough capital to operate, nothing that, there are also not enough facilities to produce drugs locally. ”  It is important that government come in heavily, appealing that, the same kind of interventions seen in the petroleum industry, should be implemented in the pharmaceutical sector “.

He said and I quote, ” pharmaceutical sector is depressed. ” This industry affects everything we do as a country since a healthy population is productive and contributes to economic prosperity,” he stated

Enumerating the problems, Oladigbolu identified funding gap in billions of naira and not enough facilities, called on government come in heavily, asking for the same kind of interventions seen in the petroleum industry, to be done in the pharmaceutical sector.

” We need government to give grant to the industry. Government has great intention to transform the industry, but those intentions have not been translated to practical means. It is time for government to take action, by fulfilling its promises to the industry.” he appealed

Julie Ekong