The President of the Pharmaceutical Society, Mr. Sam Ohuabunwa, in an exclusive interview with THISDAY said that Nigeria must create a business enabling environment that could attract investments before it could diversify the economy and eliminate poverty. Dike Onwuamaeze brings you the excerpts:
What is your view about the state of Nigeria as a nation?
Nigeria is a troubled state and buffeted by too many things that have made the environment difficult to operate in. Business needs a stable environment. It operates better in an environment where policies are predictable and stable; where there is consistent implementation and enforcement of law and order. It needs an environment where there is the facilitation of business in terms of safety of life and property and the ability for people to move and conduct economic interactions without let or hindrance. It operates in an environment where the microeconomics stability and inflation and interest rates are under single-digit or do not deteriorate speedily. If you put Nigeria against the things that I have mentioned you can see that we are very far from being an ideal environment that meets what I call a satisfactory standard for economic growth. So the economy is tough for businesses and the citizens too.
How do you see the state of the Nigerian economy? The Nigerian economy is one that should be promising because there are too many things that are in short supply in the country from infrastructure to utilities to quality education, to quality healthcare and quality housing. They are all in short supply. So, ordinarily, it should be attractive for a booming economy. But we do not seem to have gotten it right with the things that create the environment that can attract investments that will ignite and galvanise the output that is required to realise those kinds of positive things.
Where are we missing the point? We are missing the point for not understanding how investments are attracted. Our focus is not right. For me, the principal thing for an economy to grow is that there are both domestic and foreign investments. So, our major activity should be how to attract investments? I want to assure you that domestic investment is not being properly nursed, supported, or rewarded. Foreign investments are not being sufficiently attracted not just by what we say but by what we do. So we are not getting it right. Take for instance the issue of security. If you are a foreign investor and hear about all these insecurities in Nigeria will you come? There are too many things that are unpredictable in our clime but business thrives in regions with predictability and stability. Our environment and policies are not stable and find it difficult to attract the requisite investment. Remember my word “investment” and I will be repeating it in this interview that investment is the starting point for economic growth and development in any clime. And our country is not yet paying adequate attention to this.
What is the state of the pharmaceutical sector in Nigeria?
It is today a sector in transition and where growth is very limited. A sector that is excessively dependent on importation of inputs into local manufacturing and importation of finished goods for both pharmaceutical and other healthcare products. There was a national drug and health policy where it was stated that 70 per cent of the pharmaceutical products consumed in Nigeria should be produced locally by the year 2005. But as I speak to you we are just managing to do about 40 per cent or thereabout in 2021. The reasons are one, low capital aggregation for major investment; two, policy instability; three, lack of incentives to the industry and the fourth is lack of local patronage. These are caused by so many things. One, we have unfavourable cost profile. Nigeria remains a high-cost environment and under the World Trade Organisation where trade is now open, many local manufacturers are at a disadvantage when it comes to competing with cheaper imports from other countries. Local manufacturing is struggling to be able to produce at a competitive price, which has remained a tough order. This is a disincentive to local manufacturing as others are importing these goods at lower prices and sell them at higher margins without the headache of manufacturing. That is where the policy regulatory side comes in. We believe that NAFDAC is trying to look at this and with the new effort by the Central Bank of Nigeria (CBN) to support the local healthcare industry there can be a reversal in terms of increase in capacity and capability. Secondly, regulatory support is needed to ensure that products that shouldn’t be imported should remain not imported.
How is the pharmaceutical sector coping with the current foreign exchange squeeze?
The industry is in a bad shape. I made a reference to the CBN’s N100 billion loan to the pharmaceutical industry. As I speak to you some companies are still unable to convert the money into FX to buy machineries and equipment. We have complained to the CBN and they seem to have understood us. Hopefully, when it does the second tranche or third tranche of this healthcare intervention it may take that into consideration.
Emzor Pharmaceuticals announced that it would start to manufacture Active Pharmaceutical Ingredients (API) locally. How will this impact the industry?
That is part of the things we are looking for. There are three areas we think that we need help in Nigeria. One, we do not have plants that do active pharmaceutical ingredients (API), so if Emzor starts it that will be a very big breakthrough for the industry because we will now have what they are going to produce locally. It is a great move. Number two is that we cannot make vaccines locally. Three, we have a very low capacity for making sterile or injectable products that go into the vein. These are the key areas the industry needs help. The last area, which is low-hanging fruit, is in the area of taking medicine from natural plants and converts it into pharmaceutical products that can be used. The National Institute for Pharmaceutical Research and Development (NIPRD) is pushing how we can develop medicines from natural plants. That is another area focus is being put.
How did the Nigerian pharmaceutical industry survive the COVID-19 disruption?
First, the industry was shocked, which was not completely unanticipated. We predicted that if the government of Nigeria does not take medicines as a serious national security issue there may come one day we will be at war or any other thing that could block our access to essential raw materials. I think that it was in 2018 that the PSN had a conference with the theme: “Local Availability of Medicines as a National Security Issue.” But this happened in 2020. From the industry’s point of view there was a shock but thank God it did not last too long and the industry began to recover.
How do you see the pharmaceutical industry competing under the AfCFTA environment?
Ordinarily, we should be a force to reckon with. I used to be the president of the West African Pharmaceutical Manufacturers Association and I know that Nigeria was providing up to 70 per cent of pharmaceutical production in West Africa. That showed that in Africa we should be a significant producer today and also a big market. So Nigeria has an opportunity to play a major role in the AfCFTA. We have a better-developed industry outside South Africa and Egypt than many other countries in Africa. Nigeria has opportunity but that opportunity is not guaranteed if we do not ramp up. We are complacent and happy just selling oil and gas. If we are an export conscious driven country the environment will be different. If I am to be the president of Nigeria and we have this opportunity, it is going to consume us. Nobody should be talking about any other thing because our greatest economic problem arises from over-dependence on oil and gas where 80 per cent of our FX comes from and until we diversify our foreign exchange sources our economy will never have sustainable growth. And this AfCFTA is a great opportunity waiting for us to take but our responses are very, very lackluster. Our leaders do not have the understanding… it is not something that consumes them. That is because of the lack of a fundamental understanding of how to grow an economy. It hurts me and the people that think as I do. We have people leading us who seemed not to understand how to compete globally and how to make Nigeria a great economic nation.
In which way do you think that the government will help to accelerate industrial growth in the country? We should first understand the role of industry in building local GDP, creating opportunities for labor deployment and generation of income to the purse of the nation. We need to understand that and when we do it will be reflected by our policies to promote industrial output. I can tell you that there is lip service being paid to some of these. We need to get leaders who understand the subject and can speak to us in a manner that make us feel that they do. Two, they need to understand the things that drive the industry. If they did then they will know that industry survives in a predictable environment. They will create an enabling environment and create such a pressure coefficient that will drive investments to Nigeria because it is an investment that is used to create industry while the industry is used to create jobs. It is jobs that will create wealth and it is wealth that will drive away poverty. It is a matter of understanding.
How has CBN policy improved lending to the economy?
There is a high level of lending to the private sector. Money is much more available than it used to be. However, it is still expensive. We thank God for the CBN and the Bank of Industry. If not for them we will still be borrowing money at commercial rates of about 25 per cent, which is not the kind of rate that will make industries survive. I think the CBN and the BoI have seen this issue and have come to the rescue of the industry. I must say that they are doing well.
How are the Standard Organisation of Nigeria (SON) and the NAFDAC accelerating industrial growth?
We are lucky that we are beginning to get people who seem to have a better understanding of how the industry runs. But we still haven’t gotten to the optimum level. We need a businessman to run NAFDAC. We need a businessman to run the SON. We have good people there who are professionals, professors, and credible. But there is always something called experiential learning. As an industrialist who has borrowed money from the bank and knows that my bank charges me interest on Saturdays and Sundays and public holidays, I will be more sensitive in granting approvals. But the people who are running these places have their systems and you cannot rush them. You do not see that business urgency in the people who are running these places. The system is not yet sensitive to economic development and industrial development.
What is your New Nigeria Group all about?
We are leading a movement. Our mission is to recruit people like us to come and take on the reins of governance in our nation and change the narrative and move us away from this perpetual economic situation that I have spoken of. We have come to the conclusion that what we lack is appropriately enlightened leadership detribalised, sacrificial, competent, and courageous to do what should have been done. Our problem is a lack of vision. The Bible said that the people perish where there is no vision. We have no vision as of today. In creating this vision we know what the media should be doing, what the pharmaceutical industry should be doing, what the entertainment industry should be doing. So that we can say that by 2030 we would have moved from being a third world to the first world. We must have a step-by-step detailed plan on how to get there. This plan will be inclusive of every segment of Nigeria.
