Subsidy removal: Forex scarcity may cause drug scarcity, Manufacturers

Drug manufacturers in Nigeria have appealed to the Federal Government to as a matter of urgency, make foreign exchange available to help them, so as to help cushion the effects of subsidy removal on their operations.

The industry players noted that presently, there are no immediate impacts of the fuel subsidy removal on the availability of raw materials, but that rise in the cost of transportation and logistics will definitely increase the cost of production and worsen the already high cost of essential drugs.

The pharmacists expressed concern that the effect of the fuel subsidy removal will certainly have a negative impact on the cost of production, adding that it will eventually have spiralling effects on patients, many of whom might resort to alternative treatment or self-medication.

The manufacturers spoke exclusively with PUNCH Healthwise in reaction to the hike in the pump price of Premium Motor Spirit, popularly known as petrol from N184 to over N500 per litre, depending on the location of purchase.

The hike came on the heels of the announcement of fuel subsidy removal made by President Bola Tinubu during his inauguration on May, 29.

The President, who said the days of fuel subsidy have gone, stressed the need for a “thorough house cleaning” in the monetary policy.

The 2023 budget has provision for the fuel subsidy till June 2023, however, the President said funds for subsidies will be diverted to other things like education, public infrastructure, health care and jobs.

He said, “We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor. Subsidy can no longer justify its ever-increasing costs in the wake of drying resources.

“We shall, instead, re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.”

Though the President’s pronouncement was welcomed by the drug manufacturers, they, however, urged him to address the challenges faced by manufacturers while trying to access forex, in order to mitigate the impact of the subsidy removal on production costs and prices of drugs.


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