President Bola Tinubu has signed an executive order to introduce zero tariffs, excise duties, and value-added tax (VAT) on imported pharmaceutical inputs, marking a significant move towards revitalizing Nigeria’s health sector and enhancing the production of healthcare products.
In a statement released on Friday, Muhammad Ali Pate, the Coordinating Minister of Health and Social Welfare, announced the executive order aimed at bolstering local production of pharmaceuticals, diagnostics, medical devices, and other healthcare products.
“In a transformative move to revitalize the Nigerian health sector, His Excellency President Bola Ahmed Tinubu has signed an Executive Order aiming to increase local production of healthcare products such as pharmaceuticals, diagnostics, devices like needles and syringes, biologicals, and medical textiles,” said Pate.
The Minister of Justice and Attorney General of the Federation, Prince Lateef Olasunkanmi Fagbemi, is tasked with codifying the new order. Pate emphasized that the order is crucial for the success of the initiative to unlock the healthcare value chain (PVAC_NG), which was approved by the president in October 2023.
“The Order introduces zero tariffs, excise duties, and VAT on specified machinery, equipment, and raw materials, aiming to reduce production costs and enhance our local manufacturers’ competitiveness,” Pate explained.
The specified items include Active Pharmaceutical Ingredients (APIs), excipients, and other essential raw materials required for manufacturing critical health products like drugs, syringes and needles, long-lasting insecticidal nets (LLINs), and rapid diagnostic kits, among others. Additionally, the order provides for the establishment of market-shaping mechanisms such as framework contracts and volume guarantees to encourage local manufacturers.
To ensure effective implementation, the order mandates collaboration among the ministries of health, finance, industry, trade, and investment to develop a harmonized implementation framework, expediting regulatory approvals and reducing bottlenecks.
Pate noted that agencies including the Nigeria Customs Service (NCS), the National Agency for Food and Drug Administration and Control (NAFDAC), the Standard Organization of Nigeria (SON), and the Federal Inland Revenue Service (FIRS) will ensure swift implementation, with special waivers and exemptions effective for two years.
“The implication of this order is a pivot towards market-based incentives to encourage medical industrialization, reducing costs of medical products through import substitution over time, creating and retaining economic value, and enabling job creation in the healthcare value chain,” Pate said.
Pate thanked President Tinubu for his courage and commitment to ensuring Nigeria is on the path to prosperity. He also expressed gratitude to everyone who contributed to the ideas that culminated in this significant milestone.
This development follows an appeal sent by TheCable on May 23 to Tinubu and other political leaders in the country for policy and legislative actions on the escalating cost of medications, also known as “drugflation.” The publication identified key proposals from its April 2024 webinar and requested the approval of an unambiguous executive order to address the identified health sector issues and encourage patronage of local manufacturers.
