President Bola Ahmed Tinubu has issued an Executive Order to support domestic manufacturing of vital healthcare items by imposing zero tariffs, excise charges, and VAT on specialist machinery, equipment, and pharmaceutical raw materials.
Prof. Muhammad Ali Pate, Nigeria’s coordinating minister of health and social welfare, made the statement on his X page.
With the help of this project, Nigeria will be able to greatly improve its healthcare value chain by concentrating on pharmaceuticals, diagnostics, medical fabrics, biologicals, and medical equipment like syringes and needles.
As per Pate’s statement, Prince Lateef Olasunkanmi Fagbemi SAN, the Attorney General of the Federation and Minister of Justice will now proceed with the necessary measures to modify the order.
The Executive Order
The Executive Order, which the President approved in October 2023 as a crucial step in the Initiative for Unlocking the Healthcare Value Chain, places a strong emphasis on financial incentives to support local manufacturing.
It lowers manufacturing costs and boosts the competitiveness of local businesses by introducing zero tariffs, excise charges, and VAT on essential machinery, equipment, and raw materials.
Products covered by this regulation include syringes, rapid diagnostic kits, long-lasting insecticidal nets (LLINs), active pharmaceutical ingredients (APIs), excipients, and other essential materials for making medications.
To assist local manufacturers, the Order requires the creation of market-shaping tools including volume guarantees and framework contracts.
Pate said, “His Excellency President Bola Ahmed Tinubu, GCFR, has signed an Executive Order aiming to increase local production of healthcare products (pharmaceuticals, diagnostics, devices such as needles and syringes, biologicals, medical textile, etc.), marking a revolutionary step to revitalize the Nigerian health sector.”
“The Order aims to reduce production costs and enhance the competitiveness of our local manufacturers by introducing zero tariffs, excise duties, and VAT on specified machinery, equipment, and raw materials.”
In order to create a Harmonised Implementation Framework, the Order requires cooperation between the Ministers of Finance, Industry, Trade, and Investment, and Health.
This framework intends to facilitate smoother operations for local enterprises by reducing bureaucratic bottlenecks and expediting regulatory clearances.
With special waivers and exemptions valid for two years, agencies such as the Nigeria Customs Service, NAFDAC, SON Nigeria, and FIRS Nigeria are entrusted with guaranteeing prompt implementation.
This action indicates a change in direction towards market-based incentives with the goal of promoting medical industrialization and lowering import dependency.
It is anticipated that the effort will reduce healthcare costs, provide employment, and maintain economic value within Nigeria by supporting local manufacture.
Things To Note
The Coordinating Minister of Health and Social Welfare, Prof. Ali Pate, and the Director General of NAFDAC, Prof. Mojisola Adeyeye, discussed the rising costs of medications in Nigeria at a webinar in May 2024.
They stressed that the actions of the administration would soon have a positive impact on the cost of necessary medical supplies.
Prof. Adeyeye emphasised that revitalising the region’s pharmaceutical sector might help reduce the exorbitant cost of medications, which has been made worse by the Naira’s decline in value and the departure of global corporations.
She oversaw the creation of NAFDAC’s “5 plus 5” regulation programme, which encouraged imports to switch to domestic production.
Over thirty percent of new businesses in the area have been founded as a result of this programme, which has significantly boosted growth in the pharmaceutical industry.
Prof. Pate reaffirmed the administration’s commitment to tackling the underlying issues that lead to high pharmaceutical costs, such as depreciated currency and inadequate infrastructure.
He emphasised that by extending the national health insurance programme, Nigerians will be able to buy treatment through a third-party payer system, thereby reducing their financial burden.
