Tinubu signs executive order to boost local pharmaceutical production, introduce zero tax on imported inputs

President Bola Tinubu

President Bola Tinubu has signed an executive order to introduce zero tariffs, excise duties and value-added tax (VAT) on imported pharmaceutical inputs, raw materials, and equipment, 
Muhammad Ali Pate, coordinating minister of health and social welfare, said in a statement on Friday, June 28, 2024.

The order is intended to reduce production costs and enhance the competitiveness of local manufacturers of crucial healthcare products like drugs, syringes, diagnostic kits, and insecticide-treated nets. It also establishes market-shaping mechanisms such as framework contracts and volume guarantees to encourage local production.

The order mandates collaboration between the Ministries of Health, Finance, and Industry, Trade and Investment to develop an implementation framework and expedite regulatory approvals.

Relevant agencies like the Nigeria Customs Service, NAFDAC, SON and FIRS will ensure swift implementation with special waivers and exemptions effective for two years. 

This move is expected to boost local medical manufacturing, reduce costs of healthcare products through import substitution, and create jobs in the healthcare value chain.

“In a transformative move to revitalize the Nigerian health sector, His Excellency President Bola Ahmed Tinubu, GCFR @officialABAT, has signed an Executive Order aiming to increase local production of healthcare products (pharmaceuticals, diagnostics, devices such as needles and syringes, biologicals, medical textile, etc.),” Pate said.

“The Minister of Justice and Attorney General of the Federation @FedMinOfJustice, Prince Lateef Olasunkanmi Fagbemi SAN, @LOFagbemi, is to now take the next steps towards codifying the new Order.”

Pate said the order is crucial to the success of the initiative for unlocking the health care value chain (PVAC_NG), which was approved in October 2023 by the president.

“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,” he said.

“Specified items include Active Pharmaceutical Ingredients (APIs), excipients, other essential raw materials required for manufacturing of crucial health products like drugs, syringes and needles, Long-lasting Insecticidal Nets (LLINs) and Rapid Diagnostic Kits, among others.

“The Order also provides for establishing market shaping mechanisms such as framework contracts and volume guarantees, to encourage local manufacturers.”

According to the minister, the order mandates collaboration among the ministers of health, finance, as well as industry, trade and investment, to develop a harmonised implementation framework — expediting regulatory approvals and reducing bottlenecks.

Pate said agencies including the Nigeria Customs Service (NCS), National Agency for Food and Drug Administration and Control (NAFDAC), Standard Organisation of Nigeria (SON), and Federal Inland Revenue Service (FIRS) “will ensure swift implementation, with special waivers and exemptions effective for two years”.

“The implication of this order is 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,” the minister said.

Pate thanked Tinubu for his courage and commitment to ensure Nigeria is put back on the path to prosperity.

He also expressed gratitude to everyone who contributed to the ideas that culminated in the consensus that resulted in the significant milestone.
Share on Google Plus

About Newsmart


Post a Comment