PSN to CBN: Give Us Special and Dedicated Foreign Exchange Allocation to Promptly Procure Equipment & Raw Materials

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Pharmaceutical Society of Nigeria (PSN) has made a passionate appeal to the Central Bank of Nigeria (CBN) to consider making a special and dedicated allocation of foreign exchange to the healthcare/pharmaceutical companies so that they could procure their machinery/equipment and raw materials in a timely manner.

PSN, in a statement by its President, Sam Ohuabunwa, noted with pleasure that some healthcare/pharmaceutical companies that applied for the special N100 billion CBN facility have been granted.

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While pointing out that the majority of the applicants had not yet successful, PSN tasked CBN on the need to expedite the review and approval of many of the outstanding applications, so that the overall impact on industrial capacity, capability and output would be significantly enhanced in line with the noble objectives of the facility, especially as the novel Coronavirus (COVID-19) pandemic subsists and the need for self-sufficiency in local drug production persists.

Ohuabunwa added that some successful applicants have been experiencing difficulties in accessing foreign exchange in order to carry out their transactions.

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According to him, “The feedback we receive is that many of the beneficiary companies are experiencing tremendous difficulties in accessing foreign exchange to pay for the machinery and equipment in order. Many are compelled to source forex from sundry sources at much higher rates than the official CBN rate. The impact of this portends grave danger and may undermine the noble objectives.

“First, the longer it takes to get the machines and equipment in, the longer it will be for Nigeria to begin to see an enhanced local production.

“Second, the longer it takes, the more difficult it will be for the benefitting companies to begin production and generate cash flow to meet the interest and repayment obligation, as the moratorium is fast depleting.

“Third is that with forex at rates higher than the planned or forecasted rates in the business plan, the money received in Naira may no longer be sufficient to meet the stated needs.

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“And fourth is that the longer the Naira is left in the banks awaiting piecemeal allocation of Forex, the faster the value depreciates by growing inflation and the fewer the number of machinery and equipment or even raw materials that can be bought.

“All these will put an additional burden on the beneficiary companies when it comes to servicing the loans in a timeous manner.

“It is because of the foregoing and to preempt any future problems with prompt servicing of the loans that we make this special appeal to the CBN to consider making the special and dedicated allocation of foreign exchange to the beneficiary companies so that they can procure their machinery/equipment and raw materials in a timely manner, in order, that the beneficial effect of this noble program can be quickly realised and repayment made as and at when due so that the CBN will be encouraged to do more for the Pharma Industry and also to other sectors of the economy.

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“Ideally one would have wished that the loans were granted in two currencies: Foreign currency for equipment purchase and local currency for local purchase (information available in the applications and business plans of beneficiaries). This would have obviated the current challenges being faced by the beneficiary companies.

“Given the current and well-acclaimed responsiveness of our CBN leadership, it’s our hope that the CBN will accede to our request and help the industry to quickly optimise this earnestly prayed- for and long-awaited lifeline.”

Idowu Sowunmi