By Merit Ibe
Although the COVID-19 pandemic began as a health emergency that took the global community by the storm, its outbreak between November of 2019 and March 2020 when Nigeria joined the bandwagon clearly exposed the underbelly of the nation’s health architecture.
Before then, successive administrations had paid scant attention to the growing public advocacy for more investments into the country’s healthcare systems given the decadence the sector had suffered over the years.
While many saw the weakness of the nation’s health infrastructure as a national embarrassment with hospitals that have degenerated into mere consulting clinics that can’t handle medical emergencies, the political elite for obvious reasons saw nothing wrong with the huge amount of foreign currency spent annually by Nigerians in overseas medical tourism.
But while they traveled to Europe and America for specialists attention, majority of the citizens and taxpayers have been stranded at the consulting clinics that our hospitals had suddenly become.
The effect of this development however is that in addition to being a net importer of food and other manufactured goods, Nigeria was also spending billions of Naira on medical supply imports and services amid its receding foreign currency earnings.
This was clearly the picture of things across the country when the COVID-19 pandemic struck in March last year.
However, it was in a bid to change this narrative to that the Central Bank of Nigeria (CBN) as part of measures to cushion the economic shock on the Nigerian populace that it floated a NGN100 billion Credit Support to the Healthcare Sector.
Acting Head, Corporate Affairs of the CBN, Mr. Osita Nwanisobi, said the Health Sector Intervention Facility (HSIF) was established to address health infrastructure decay in the country.
Nwanisobi said: “This special intervention was designed to provide support to indigenous pharmaceutical companies and healthcare practitioners intending to build or expand their capacity to strengthen the entire healthcare delivery capabilities to cater for potential spikes in demand for healthcare services and related matters.”
He said that over N85 billion have so far been disbursed to date covering 82 projects, with N22.5 billion disbursed to States governments for the revamp of primary health care centres across the country.
In order to ensure seamless implementation, the apex bank also issued operational guidelines to regulate the scheme to guarantee faster attainment of its goals and objectives in the interest of the citizens.
The Godwin Emefiele – led CBN had intended through the healthcare scheme to provide long-term, low-cost finance for healthcare infrastructure development that would lead to the evolution of world-class healthcare facilities in the country.
Part of the policy initiative was to improve access to affordable credit for indigenous pharmaceutical companies to expand their business operations, and comply with the World Health Organisation’s Good Manufacturing Practices (WHO GMP).
For the Nigerian state, one of the fundamental objectives of the health care intervention scheme was to reduce medical tourism to Europe and the United States of America and to conserve foreign exchange currently in very short supply.
This was expected to ultimately support the provision of shared services through one-stop healthcare solution to enhance competition and reduce the cost of healthcare delivery in the country.
To avoid a scenario where the initiative would be seen as another national cake for the political elite, the CBN outlined some critical indices that manufacturers of drugs and medical equipment must meet before accessing the Fund.
These include such considerations that prospective beneficiaries must be Healthcare service providers in medical facilities like hospitals/clinics, diagnostic centres/laboratories, fitness and wellness centres, rehabilitation centres, dialysis centres, blood banks among others.
Others are that potential beneficiaries must be in the medical value chain of Pharmaceutical/Medical products distribution and logistic services; or in other human health care services providers as may be determined by the CBN as appropriate.
Eligible activities covered under the scheme include: manufacturing of pharmaceutical, drugs and medical equipment , establishment and expansion upgrades of basic and specialised health care facilities , distribution of medical and pharmaceutical drugs and supplies and manufacturing of medical pharmaceutical drugs and distribution technologies.
Also included are any other healthcare value chain activities as may be prescribed by the CBN from time to time.
Working Capital component of the Fund according to the guidelines would be for a maximum period of one (1) year, with provision for rollover not more than three (3) years and the Term Loan shall have a maximum tenor of not more than 10 years with a maximum of a one-year moratorium on repayment.
A qualified participant under the Scheme is entitled to Working Capital: 20 percent of the average of 3 years of the company’s turnover subject to a maximum of NGN500 million per obligor (where the enterprise is not up to 3 years in operation, 20 percent of the previous year’s turnover will suffice).
For term loan, it is a maximum of N2 billion per obligor.
While the scheme is still running its full course, stakeholders in the health sector have given kudos to the Central Bank of Nigeria’s (CBN) N100 billion Pharmaceutical Intervention for COVID-19, for its impact on the sector.
They argued that most local pharmaceutical industries, have leveraged the Fund to boost their production capacities especially in the manufacturing of facemasks, personal protective equipment (PPP), hand sanitisers, gloves, anti viral drugs, ventilators, medical supplies and vaccines.
So far, the apex bank has disbursed over N93 billion of the Fund to beneficiaries whose activities are positively impacting the economy and healthcare system.
The intervention was with a view to strengthening the sector’s capacity to meet potential increase in demand for healthcare products and services.
Chairman, Pharmaceutical Manufacturers Group of Manufacturers Association of Nigeria (PMG-MAN), Dr. Fidelis Ayebae, admitted for instance that all the companies that met the loan requirement got it on the terms specified in the CBN guidelines.
“We are happy with the CBN for the initiative and the way it was implemented.
Members that are yet to access the Fund are working with their commercial banks with whom they have a relationship to close up documentation gaps before moving on to CBN.”
Ayebae added that the scheme is a success in intervention programme of the CBN, stressing that its impact can be seen in the financial performance of the early recipients of the loans.”
For his part, Mazi Sam Ohuabunwa, President of the Pharmaceutical Society of Nigeria (PSN) and convener of the New Nigeria Group (NNG) observed that the impact of the health sector intervention by the Central Bank of Nigeria was still evolving as it was yet to become very significant.
“It will with time. There is a time lag between when the money is released and the impact is made. Most of the money was given to upgrade facilities, build new facilities and enhance GMP compliant facilities.
Some companies are still looking for foreign exchange to order their equipment. They have the money but no the foreign exchange.
It’s only those who needed to buy raw materials that may have utilised the working capital component of the loan. The fund is helping a bit to cushion the pressure on unavailability of some medicines,” he said.
According to him, those who want raw material may have been able to get them in, but in terms of capacity improvement, capacity to be a GMP compliant, in terms of being able to manufacture vaccine, we are not yet there.
The impact is still limited but there is hope that in the next 12 to 18 months, the impact might be much more crystallised.
On checking Medical tourism out of Nigeria, Ohuabunwa said that it may have been in a little degree. I believe it may have affected medical tourism in a little degree. In the first place, the COVID -19 lockdown was an opportunity for reduction in medical tourism.
For once, Nigerians thought of taking care of their issues locally within Nigeria .
President Muhammad Buhari, for example did not travel for his medical checkup for one year and he survived.
So that impact of the COVID lockdown globally and nationally helped to force people to look inwards. So that forced down medical tourism. Secondly, having seen that the local pharmaceutical industry and may be local healthcare can to some degree meet some local needs, some feat has developed in Nigeria’s healthcare to be able to fill some gaps. And I believe with some of the CBN money going into raw materials purchase, it may have also dampened the pressure on the scarcity of special medicines which was beginning to manifest during this period.”
He argued that it is still not significant but there is some measurable effect.
Ohuabunwa said that with the N100billion giving hope that things would be done better and the capacity and capabilities will improve, we will enter new production areas that we haven’t been before like vaccines manufacturing. So that gives hope and increased expectations. We may not be able to measure that, but what human beings need to live is hope. With hopelessness they can’t see any future, then their problem is compounded but with hope, the pressure of the problem is a bit minimised, because hope keeps everybody alive.
Manufacturing and importation of drugs
There is a positive impact, that cannot be denied. I’m only only saying that impact has not become very significant because of the time gap between procuring the money, converting it to foreign exchange, importing the equipment to upgrade the local facilities. The portion that goes into import of raw materials certainly may have had some positive impact on minimising drug shortages.
Lessons Nigerians learnt
We have learnt that we should not wait until we run into trouble before we start preparing for tomorrow. We should become more proactive, more prepared and more anticipatory of changing dynamics in healthcare, health disease and health burden.
Nigeria ought to improve on its health facilities, preparedness and emergency response. Now we have things that we did not have at the beginning like the PPGs Personal protective Garments, like Now we have companies producing them, so that is part of the lessons and the gain. The same quality of what we got from India and China .
So there is a lot of efforts in that way and the private sector has learnt a lot of lessons and I believe that government is also learning especially with the response of institutions like the CBN’s N100billion for increasing capacity in the healthcare and drug production.
This is also supporting research because its clear that without research, innovation cannot take place. So CBN has also provided some window to promote research, these are the lessons we have learnt and I believe we will walk along those lines if we don’t want to be caught napping when a new virus, bacteria or disease invades the country again, because as long as man is on earth and refuses to follow the way of God we will continue to have those problems.
Also reacting, Mr Frank Onyebu, Chairman, Manufacturers Association of Nigeria, Apapa Branch, gave kudos to the CBN, not just for the idea of the N100 billion healthcare intervention fund, but also for a diligent implementation of the project. “The fund was set up to boost the production capacities of pharmaceutical manufacturing companies as part of measures to cushion the effect of the coronavirus pandemic on the economy. It is commendable that, unlike several of similar interventions in the past, the execution of this policy was remarkably successful. It is gratifying that a reasonable percentage of pharmaceutical manufacturers who met the requirements were able to access the loan,” he said.
He stated that in addition to the expansion of their capacities in drug production, some members were able to set up plants for the production of face masks, hand sanitizers, gloves and other medical supplies. The Apapa MAN boss urged the government to take a cue from the management of this fund as several good policies in the past have been frustrated by bad implementation strategies. He contended that the recurring issue with intervention funds in general is that, most often than not, the funds end up in the wrong hands, leaving out the people who really need it!