After accessing the Central Bank of Nigeria’s (CBN) Health Sector Support Facility, operators in the pharmaceutical industry who are beneficiaries are having problem converting the borrowed intervention fund into foreign exchange (forex) for equipment purchase.
They are worried that due to scarcity of forex, many of them are already losing in two fronts occasioned by inflation and depreciation of the Naira. The N100 billion credit support intervention fund is part of proactive measures to cushion the impact of the Coronavirus (COVID-19) pandemic in Nigerian economy.
Consequently, the President of the Pharmaceutical Society of Nigeria (PSN), Mazi Sam Ohuabunwa, said beneficiaries of the funds have now been placed in a position that they are unable to generate necessary cash flow to meet the debt obligation and repay the loan as laid down in the conditions for accessing the fund.
Ohuabunwa, therefore, appealed to the Federal Government and the CBN to extend the moratorium, cut interest rate and extend repayment period of the fund.
He made the appeal during the Finance Correspondents Association of Nigeria (FICAN) webinar workshop with the theme “Nigeria manufacturing sector and CBN N100 billion Healthcare Intervention Fund, Opportunities, Challenges and post Covid-19 Expectations.”
He said that the funds represents a boost to the healthcare manufacturing sector which is fashioned to enhance the wellbeing of Nigerians, boost productivity and enhance employment through expansion of production lines, but prevailing factors serves as drawback to achieving the objectives of the funds which appeared to have placed greater burden on the pharmaceutical companies that have so far accessed it.
While lauding the N100 billion intervention fund as major response to the sector from the Federal Government, the PSN president said that beneficiaries of the fund are currently battling with challenges of securing foreign exchange to pay for the healthcare equipment tied to the funds to enhance expansion and boost productivity.
The problem occasioned by forex scarcity, he said, is further compounded by the divergent exchange rate, instability of the rates and devaluation of the; local currency which has further watered down the value of the funds.
The PSN president affirmed that while the moratorium for the fund is pegged at one year, with single digit interest rate, and factoring challenges posed by the prevailing economic condition, the CBN, he appealed, need to reconsider extending the moratorium period to two years, drop the interest rate further and extend the debt repayment period.
He further appealed to the CBN to make special forex provision for the health sector to enable them deploy the borrowed funds in the importation of equipment. “Give us direct forex line instead of leaving us to the mercy of the commercial banks,” he added.