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Making CBN’s Credit Support Fund Work

Recent reports affirming the receipt of the Central Bank of Nigeria credit support facility by a number of pharmaceutical industry operators raises the hope of a brighter future for the critical sector of the nation’s economy.  As at the last count about 15 operators have so far accessed the facility while another 15 are currently waiting for the apex bank’s approvals.
The reports have also put paid to earlier speculations that the intervention may go the way of many developmental initiatives inaugurated by government that never went beyond paper work. CBN deserves commendation for the commitment in rolling the policy off the ground.
As part of proactive measures to cushion the negative impact of coronavirus pandemic, the CBN had in March introduced a N100 billion credit support intervention for the healthcare sector accessible at 5 per cent interest rate with one year moratorium. From the outset the initiatives were strategically developed to stimulate effective collaboration between pharmacists in the academia, research institutes, and the entrepreneurs essentially to invigorate home grown solutions to health challenges besetting Nigerians.
The reform measures being introduced by Prof. Mojisola Adeyele-led NAFDAC that aims at strengthening local pharmaceutical industry for global impact appears to be part of the larger picture. Recent synergy between CBN and NAFDAC points to this fact. It is not a coincidence that the NAFDAC chief chairs the committee on HSRDIS and also plays a key role in the implementation of the CBN intervention fund to the healthcare sector. This is laudable.
More so, a reversal of the age-long trend of importing over 70 per cent of Nigeria’s drug needs from India and China which Prof. Adeyeye has been spearheading since assumption of office remained the primary target of the policies.
For decades on end, PMG-MAN and stakeholders in the pharmaceutical sub-sector have been pushing for funding for the industry, funding for research and development, and a deliberate effort in achieving over seventy per cent of local manufacture of drugs in the country without result. Making the CBN credit support fund work is a good way of expressing gratitude to President Mohammadu Buhari-led government for the political will.
The appeal for extension of moratorium and retention of 5 per cent interest rates on the CBN intervention facility by PMG-MAN and PSN leadership is in order but kicking against the new forex policy is not for obvious reasons.
A review of the forex allocation framework to help address the critical needs of the economy including mitigating areas of possible forex leakages remained the imperative option in securing the nation’s economy.
The survival of the nation’s economy is paramount. It is crucial for Nigeria business community to support government achieve a vibrant economy.  Such an economy unleashes a lot of benefits that the country badly needs at this moment to break away from looming economic quagmire.
Access to living-wage; employment and economic opportunities; participation in the labour market for all members of society; access to basic necessities, including safe and affordable housing, healthy food, education, social and recreational opportunities are standard harvests of a vibrant economy. It also promotes direct foreign investments. Government deliberate support to any sector is mostly predicated on these benefits as underlying motivation. PMG-MAN membership must recognize this.
For too long, enemies of the country have cashed in on lax forex policies to perpetrate illegality and that has adversely affected our economy. Our external reserves are in constant bleeding due to pressures – most of which come for doubtful purposes. This must stop.
In proffering a solution, one of the areas considered by the CBN as a possible source of forex leakages are the activities of Buying Companies (BC)/ Agents who act as intermediaries between the Ultimate Product Supplier (UPS) and the Nigerian businesses.
In CBN’s view, this arrangement leaves room for potential over-invoicing, product mispricing and other mechanisms that increase the demand for forex by these local businesses for the payment of the intermediaries.
We join Mr Tony Elumelu, a global banking czar, economic experts, and indeed well-meaning Nigerians in commending CBN for the new forex policy. Previous policies promoted round tripping.
Operators of pharmaceutical industry in Nigeria should be at the forefront of pushing for protectionism of the economy. The sensitive nature of the sector makes it compelling. In dealing with health of the nation the standard expectation is that operators must always stand out in conversations related to plugging compromises in our economy and not join the bandwagon.
Opportunities within the country and on the African continent abound in the pharmaceutical industry space to tap if operators could focus on following the right process. Short term gains may no longer be fashionable giving the enormous reform efforts underway in the nation’s economy.
Building on the CBN intervention could be the starting point. Strict adherence to repayment guidelines is key to engender mutual trust for future gains.
The pharmaceutical industry operators must shun crooked ways that breed compromises and embrace well thought out initiatives like five plus five validity policies fashioned out by NAFDAC to ensure that the industry is firmly footed.  Only by so doing would the future of the pharmaceutical industry in the country work for the benefit of all.

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