The Pharmaceutical Society of Nigeria has lamented that many pharmaceutical companies have not been able to access the Central Bank of Nigeria’s N100bn credit facility.
According to the PSN, pharmaceutical firms have been facing all sorts of difficulties in their attempts to access the CBN’s intervention fund.
It could be recalled that the CBN had announced on March 25, 2020, that it has earmarked N100bn credit support for the health sector to ameliorate the effect of COVID-19 pandemic.
The official circular signed by CBN’s Director of Financial Policy and Regular Department, Kevin Amugo directed that all deposit banks accede to loan requests from indigenous pharmaceutical manufacturers and healthcare practitioners intending to ramp up their capacity.
PSN President, Sam Ohuabunwa told PUNCH HealthWise that the society was deeply concerned about the lull in the application process that has so far affected 26 of the 32 indigenous pharmaceutical companies that applied for the fund.
“We have noted with pleasure that some pharmaceutical companies that applied for the special N100 billion CBN facility had been granted. Nevertheless, we are distressed that the majority of the applicants are yet to be successful.
“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 the 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 said.
While acknowledging that six of the 32 applicants for the credit support were successful, the PSN president noted that the beneficiaries also face an uphill task of accessing forex to procure the needed pharmaceutical machinery.
“Again, 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 they ordered.
“Many are compelled to source forex from sundry sources at much higher rates than the official CBN rate. The impact of this portends grave danger and may undermine the noble objectives,” he stated.
He expressed concerns that the longer it takes for the manufacturing companies to ship in the machines and equipment, the longer it would be for Nigeria to begin to see an enhanced local production.
The PSN president also opined that the delay could further make it difficult for the benefitting companies to begin production and generate cash flow to meet the interest and repayment obligation, as the moratorium is fast depleting.
“Thirdly, now that the forex is at higher rates than the planned or forecast rates in the business plan, the money received in Naira may no longer be sufficient to meet the stated needs.
“We need to consider the fact that the longer the Naira is left in banks awaiting piecemeal allocation of forex, 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,” he bemoaned.
Ohuabunwa disclosed that he, therefore, deemed it fit to make a passionate appeal to the CBN to consider a dedicated allocation of foreign exchange to the beneficiary companies so that they can procure the needed machinery, equipment and pharmaceutical raw materials on time.
“Ideally one would have wished that the loans were granted in two currencies: Foreign currency for equipment procurement and local currency for local purchase as indicated in the applications and business plans of beneficiaries.
“This would have obviated the current challenges being faced by the beneficiary companies.
“Given the current and well-acclaimed responsiveness of our CBN leadership, we hope that the CBN will accede to our request and help the industry to quickly optimize this earnestly prayed-for and long-awaited lifeline,” he said.
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