Nigeria Imports N109 Billion of Malaria Drugs in Six Months, Local Pharmaceuticals Struggle

Nigeria has continued to import anti-malarial drugs worth billions of naira every year amid foreign currency shortages and struggling local pharmaceuticals, reports ODINAKA ANUDU

At a time when Nigeria’s pharmaceutical industry is struggling for lack of patronage, Africa’s most populous nation has imported anti-malarial drugs worth N109.46 billion in six months.

According to foreign trade statistics released by the National Bureau of Statistics, the country imported anti-malarial drugs worth 65.988 billion naira in the third quarter of 2021 and 43.472 billion naira in the fourth quarter of the same year.

This means that the import of antimalarial drugs per capita during this period was 547 Naira. The per capita import of medicines is obtained by dividing the amount of imports in naira by the population.

In literal terms, this means that every Nigerian took an imported anti-malarial drug worth at least N547 during this period.

The BNS reports did not mention the names of the specific antimalarial drugs imported during the two quarters.

When financial PUNCH When asked about drug names, the agency said it only provides information on items with Harmonized System codes, also known as HS codes.

According to the NBS explanation, many antimalarial drugs were classified under the HS code.

HS codes are “numerical codes that allow the systematic definition and classification of all goods in international trade, in the tariffs of signatory countries”, according to Cotecna, a company that provides testing, inspection and certification.

The HS code for drugs imported in the third and fourth quarters was 3004909000.

Antimalarial drugs were Nigeria’s 14th and 15th largest imports in the third and fourth quarters, respectively, according to data provided by the agency.

It could be so much worse

According to the United Nations COMTRADE, which is a global trade database, Nigeria imported drugs and pharmaceuticals worth N2.97 billion in 2020.

A different set of data compiled by CEIC, a global data company founded by economists and other experts, provided a different figure. The organization said Nigeria imported medicinal and pharmaceutical products worth $417.523 million in 2020, more than most African countries except Egypt ($678.318 million) and South Africa ($637.748 million).

Apart from importing comprehensive drugs to Nigeria, the country depends on India and China for the majority of its active pharmaceutical ingredients, also known as APIs, which are raw materials used in the production of drugs.

Nigeria lacks a strong petrochemical industry capable of manufacturing APIs and excipients, also known as raw materials or inputs.

The COVID-19 outbreak in 2020 has exposed the risk of relying on imported drugs and APIs. At the onset of COVID-19, several pharmaceutical companies and hospitals struggled to import drugs and APIs as major manufacturers of the items banned export to ensure they had enough for their citizens.

In an earlier interview, the Chairman of the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria, Fidelis Ayabae, told this reporter that the country needs to pay more attention to the local production of drugs, rather than lingering as much on drug importers.

Ayabae said the attitude of nations at the start of the COVID-19 period should be a lesson for Nigeria which was doing little to support its local manufacturing sector.

Drug factories in trouble

Prior to 2017, Evans Medicals was once one of the largest pharmaceutical companies in Nigeria. She had acquired prequalification from the World Health Organization that would allow her to compete in international contract rounds.

But in 2017, a court ordered the drugmaker’s assets to be taken over by First Bank and the defunct Skye Bank due to a bad debt.

Pharma Deko, a drug manufacturing company located in Agbara, Ogun State, has been struggling for some time. It incurred a post-tax loss of N325.205 million in its 2020 financial year and another loss of N69.757 million in 2021.

Besides Pharma Deko, The Financial Punch found that some unlisted companies are also struggling due to the difficult operating environment.

The total revenue of local drug manufacturing companies listed on the Nigerian Exchange Group in the 2021 financial year was N46.312 billion, or just 42.3% of the value of antimalarial drugs imported into the country in just six months.

“If we are importing so much, it raises so many questions about how seriously we take local manufacturing,” said managing director of SKG Pharma, one of the country’s leading drug producers, Dr Okey Akpa, at The Financial. PUNCH.

He argued that the local manufacturing industry produces antimalarial drugs and has the capacity to cater to the local market, noting that “this is a source of concern for us in the industry.”

He explained that a lot of progress is being made in the Nigerian pharmaceutical industry as a number of companies are upgrading their facilities and increasing their capacity in various forms.

Possible sources of imports

There are three possible sources of drug importation into Nigeria. The first source is imports from multinational companies that have offices in Nigeria but no local manufacturing plants. Many of them are members of the Association of Nigerian Overseas Pharmaceutical Manufacturers Representatives, a source said.

Another possible source is drugs from donor agencies. Many donor agencies export medicines to Nigeria to support their various causes. The third source is the importers who are in the business to make a profit.

Decree 5 does not work

In February 2018, the Nigerian President, Major General Muhammadu Buhari (Retired), signed the “Executive Order 5 for Project Planning and Execution, Promotion of Nigerian Content in Contracts and Science, Engineering and technology”.

The executive order has 18 main segments, primarily promoting local content and preference for local materials, businesses and employees.

But manufacturers complain that this order does not work because government agencies sometimes ignore local manufacturers during contract rounds, especially when there is also capable local talent.

The challenges are the same

Like other manufacturers, one of the biggest challenges for the local pharmaceutical industry is the shortage of foreign currency. Many of them source the currency needed to import APIs and excipients from the parallel market where one dollar is between N570 and N580.

In the fourth quarter CEO Confidence Index conducted by the Manufacturers Association of Nigeria, CEOs of companies including pharmaceutical companies ranked the high cost of raw materials as their biggest challenge.

One of the CEOs told the Financial PUNCH on condition of anonymity he recently sought FX at his local bank but only got 5% of what he needed.

He criticized the neglect of the manufacturing and productive sectors in terms of currency allocation.

Other critical challenges faced by pharmaceutical companies are lack of skilled labor, insecurity, high transportation costs, frequent changes in government policies, and lack of funds.

Go forward

According to Ayabae, hospitals should use drugs produced by local manufacturers.

“There is local capacity for hospital drugs, which are used for general ailments here,” he said.

According to MAN, the federal government must ensure efficient allocation of available foreign exchange to the productive sectors, especially the manufacturing sector, for the import of raw materials and vital machinery and equipment that are not available locally.

“Government should also expressly direct the Central Bank of Nigeria to consult with the Ministry of Industry, Trade and Investment and effectively engage MAN on measures to improve the supply of foreign exchange to manufacturing businesses” , MAN said in a statement.

“Unify the academic curriculum with industrial skills needs and requirements to ensure sustainable development of skilled workforce for industries,” MAN added.

Akpa, for his part, called on local petrochemical plants to reduce the reliance of pharmaceutical companies on imported APIs and excipients.

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