The Pharmaceutical Society of Nigeria (PSN) has urged the Central Bank of Nigeria (CBN) to provide a dedicated allocation of foreign exchange (forex) for healthcare and pharmaceutical companies to enable them pay for equipment and machinery ordered.
This was contained in a statement by the PSN president, Mazi Sam Ohuabunwa, which was made available to the Daily Sun yesterday.
He lamented that after accessing the special N100 billion facilities by the CBN to the sector to cushion the effect of COVID-19 pandemic, many of the companies are finding it extremely difficult to access forex to pay for the machinery and equipment which they have already made orders for. “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 noted.
PSN boss thanked CBN for the kind gesture but lamented that 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 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 added.
On the impacts of the difficulties accessing forex, he said: “The longer it takes to get the machines and equipment in, the longer it will be for Nigeria to begin to see an enhanced local production.
“Again, the longer it takes, the more difficult it will be for the benefitting companies to begin production and generate cash flow to meet the interest and repayment obligation, as the moratorium is fast depleting.
“With forex at rates higher than the planned or forecasted rates in the business plan, the money received in Naira may no longer be sufficient to meet the stated needs, the longer the Naira is left in the 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 record time.”
Ohuabunwa, however, said the appeal for the CBN to consider providing special and dedicated allocation of foreign exchange to the beneficiary companies became necessary so that they could procure the machinery, equipment and raw materials they need in a timely manner.
“This is also to ensure that the beneficial effect of this noble programme can be quickly realised and repayment made as and when due. That will encourage CBN to do more for the Pharma Industry and other sectors of the economy. Ideally one would have wished that the loans were granted in two currencies: foreign currency for equipment purchase and local currency for local purchase. This would have obviated the current challenges being faced by the beneficiary companies.
“Given the current and well-acclaimed responsiveness of our CBN leadership, it’s our hope that the CBN will accede to our request and help the industry to quickly optimise this earnestly prayed- for and long-awaited lifeline,” he submitted.