The Pharmaceutical Group of the Manufacturers Association of Nigeria(PMG MAN) has warned that the combination of the Common External Tariff(CET), and a wholesale implementation of the National Drug Distribution Guidelines(NDDG) will lead to over a million job cuts in the Nigerian pharmaceutical industry.
The CET is one of the instruments of harmonising ECOWAS Member States and strengthening its common market by adopting same customs duties, import quotas, preferences or other non-tariff barriers to trade apply to all goods entering the area, regardless of which country within the area they are entering.
On its part, the NDDG that was initiated by the Federal Government in 2012 to reform and regulate drug distribution in the country was expected to become effectively from July 1, 2015.
However, at a press briefing organised by PMG MAN on Thursday in Lagos, the drug makers raised fears that the two policies if not fine-tuned would lead to over a million job losses in the pharmaceutical industry in Nigeria.
Explaining the body’s position, its president, Mr. Okey Akpa said the CET “spells doom for the local industry as imported medicines will become far cheaper than locally produced ones. This situation is inimical to the survival of the local pharmaceutical manufacturing sector, and there is a need for an urgent review.”
Mr. Akpa hinged his argument on the CET’s policy, which places zero tariff on finished imported medicine while essential raw and packaging materials required by the industry for local medicine production attracts 5% to 20%.
The president said the industry had under its employ directly or indirectly over one million persons, adding that the lot are at risk of losing their jobs if the policy was not tuned up.
He said, “The lack of demand for locally manufactured medicines as a result of cheap imports will lead to idle capacities and negatively impact previous investments in the sector worth over N300bn.
“A weak local manufacturing sector will inevitably lead to an influx of cheap imported medicines of doubtful quality.”
Suggesting ways to avert the ominous dark clouds owing to the controversial CET policy, Mr. Akpa said that raw materials imported by pharmaceutical manufacturersshould be eligible for duty-free entry, and an import adjustment tax of 20% on imported finished pharmaceutical products of HS Codes 3003 and 3004 should be imposed immediately.
While commending the federal government over the NDDG, the PMG MAN president called on the authority to review the idea in consultation with stakeholders, and postpone the effective date.