By Chioma Umeha
Pharmacists and pharmaceutical industry managers have been challenged to take advantage of the current challenges of economic recession to reinvent the industry and build a strong local manufacturing base for pharmaceutical products.
One of the experts who threw the challenge at the 89th annual conference of the Pharmaceutical Society of Nigeria (PSN) held recently in Minna, Niger State was Olu Akanmu, Fellow of Nigeria Academy of Pharmacy.
Akanmu who delivered the keynote address at the conference entitled, “Pharmaceutical Industry, National Development and A Fairer Society,” explained that the negative exchange rate movement caused skyrocketing prices for pharmaceutical products for those who could source foreign exchange.
The seasoned pharmacist reasoned that this is because the Nigerian pharmaceutical industry is virtually import-dependent from raw materials to finished products.
He said that it also implied reduced capacity utilisation for the pharmaceutical companies who were unable to source foreign exchange (Forex) for their raw materials.
On the demand side, he said it meant expensive medicines for the Nigerian people, far above their means and the rationalisation or the contraction of demand from retail to wholesale and the factory gates.
For government, he said that the challenge is that it has to contend with other diverse priority and preferential sectors such as petrol imports and cannot satisfy their Forex demand at current prices.
“I believe as argued in my earlier economic papers titled: ‘Government must let markets work’ published in leading Nigerian newspapers that markets are the most efficient ways to allocate and price scarce resources.
“Attempts to undo the market, even with patriotic intentions, as we have seen with petroleum product markets create price distortions; dis-incentivise private provision to complement public supply, that which is critical in a period of fiscal constraints.
“It creates a parallel, rent seeking market for the privileged few to make undeserved profits,” he added.
Akanmu advised government to stay committed to flexible, market-driven exchange rate policy, to ensure effective co-ordination of fiscal and monetary policies and deploy political sagacity in the Niger Delta, to contain militancy and get oil production to recover back to two million barrels a day from current 1.4million barrels.
“At current oil price of 50 dollars over the coming period, in addition to a market driven exchange rate that eliminates speculation premium and distortion, we should see private capital flows of Forex returning. This along with higher government revenue at 50-dollar oil price and increased oil production should improve foreign exchange supply and ultimately help the naira with the wide positive spirals across the economy,” he stated.
He said that the current situation calls for a deeper reflection on how we would build and develop a pharmaceutical industry that is increasingly less import dependent, and by so doing can absorb the shocks of foreign exchange volatility, which is inevitable in the boom, and bursts of global economic cycles.
Other competitiveness issues which government must address and which have consistently been scored low by international organizations are infrastructure, access to finance, security, corruption and governance, quality of education, skilled manpower and labour productivity.
He maintained that the low competitiveness prevents Nigeria from benefiting from the “flying geese” economic theory model that says that when labour cost increases in developed markets, old technologies, factories and production moves from developed countries to lesser-developed countries with cheaper labour cost.
He said that China and Japan benefitted from the model as factories moved production from the US and Europe to China.
The Pharmacy Fellow, however, warned that unless government deploys the right economic and governance actions, we may not see the pharmaceutical geese flying from Asia to Africa or Nigeria.
“The geese may be stuck in Asia, in India and China for a long time to come. This is essentially what we have today with the Nigeria pharmaceutical industry with Western multi-nationals dominating advance medicines category and the Indian and Chinese companies dominating the manufacturing of basic medicines, leaving our local players to be largely importers of finished products or raw materials,” he stated.
Akanmu warned that building strong local pharmaceutical industry is not a matter to be left for the next generation because it borders on national security for a nation to have a minimum level of critical capacity to produce the medicines it needs.
“There will always be global trade and relative comparative advantages among nations for different products. However, to be absolutely dependent on other countries, to produce very little, to bulk import most medicines consumed, without a national structured articulated plan, with specific goals and timelines to gradually replace a critical level of imports by local manufacturing is tantamount to a pathological health crisis and perpetual poor access to medicines,” he stated.
He contended that the importance of the industry to the wellbeing of the people is far bigger than its contribution to the Gross Domestic Product (GDP).
The fellow of the Academy of Pharmacy insisted :“The contribution of the pharmaceutical industry to citizen well-being and their quality of life far exceeds what is captured by its size and share of national GDP. We must therefore commission a new level of advocacy with government and policy makers to appreciate better the pharmaceutical industry and urgently address the disincentives to local pharmaceutical manufacturing because of its importance to our citizen’s well-being.
“We must also become more visible in the advocacy to improve the ease of doing business in Nigeria, to improve our national competitiveness and create jobs for the mass of our youths.
Noting that the Pharmaceutical Society of Nigeria has clocked about 90 years old, he added, “The generations before us recognised their own place and purpose in history and fulfilled their mission. Let this generation too recognise its place and purpose in history and fulfill its own mission.”
Similarly, Pharm Ahmed Yakasai, President of PSN, in his address at the conference urged members to revisit their practical model, given Nigeria’s huge demographic complexities.
He reiterated that such complexities in Nigeria’s demography, coupled with so much ageing and youthful population with diverse diseases has challenged pharmacists to revisit their mode of practice.
“Our health profile as a nation is far from being healthy. This calls on us pharmacists to be part of the solution. It is high time we responded with speed and positive gait,” Yakasai said.
“We must also recognize that despite our estimated operational value of over $2 billion, our industry is yet to be a notable contribution to our nation’s GDP.
“The complexities of our demography – substantial ageing alongside a youthful population within an estimated over 180 million people with complex disease profiles – are indications of the need for us to revisit our practice model and industry positioning.”