President Bola Tinubu has signed an executive order to introduce zero tariffs, excise duties and value added tax (VAT) on imported pharmaceutical inputs.
In a statement on Friday, Muhammad Ali Pate, coordinating
minister of health and social welfare, said the order is aimed at revitalising
the Nigerian health sector and increase production of healthcare products.
“In a transformative move to revitalize the Nigerian health
sector, His Excellency President Bola Ahmed Tinubu, GCFR @officialABAT, 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.),” Pate said.
“The Minister of Justice and Attorney General of the
Federation @FedMinOfJustice, Prince Lateef Olasunkanmi Fagbemi SAN, @LOFagbemi,
is to now take the next steps towards codifying the new Order.”
Pate said the order is crucial to the success of the
initiative for unlocking the health care value chain (PVAC_NG), which was approved
in October 2023 by the president.
“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,” he said.
“Specified items 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.
“The Order also
provides for establishing market shaping mechanisms such as framework contracts
and volume guarantees, to encourage local manufacturers.”
According to the minister, the order mandates collaboration
among the ministers of health, finance, as well as industry, trade and
investment, to develop a harmonised implementation framework — expediting
regulatory approvals and reducing bottlenecks.
Pate said agencies including the Nigeria Customs Service
(NCS), National Agency for Food and Drug Administration and Control (NAFDAC),
Standard Organisation of Nigeria (SON), and Federal Inland Revenue Service
(FIRS) “will ensure swift implementation, with special waivers and exemptions
effective for two years”.
“The implication of this order is pivot towards market-based
incentives to encourage medical industrialization, reducing costs of medical
products through import substitution over time, creating and retaining economic
value and enabling job creation in the healthcare value chain,” the minister
said.
Pate thanked Tinubu for his courage and commitment to ensure
Nigeria is put back on the path to prosperity.
He also expressed gratitude to everyone who contributed to
the ideas that culminated in the consensus that resulted in the significant
milestone.
The development follows an appeal sent by TheCable on May 23
to Tinubu and other political leaders in the country for policy and legislative
actions on the escalating cost of medications, also known as “drugflation”.
The publication identified key proposals from its webinar —
which was held in April 2024 — in the appeal and requested the approval of an
unambiguous executive order to tackle the identified health sector issues, and
encourage patronage of local manufacturers.
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