Drug Production: Pharmacists Urge CBN to Reduce CRR to 10.0%

…Call on banks to support the pharma, health industry with loans

Rebecca Ejifoma

Critical stakeholders in the pharmaceutical industry have urged the Central Bank of Nigeria (CBN) to reduce the Cash Reserve Ratio (CRR) of Deposit Money Banks (DMBs) in efforts to improve the local production of drugs.

This call was the thrust of St. Racheal’s Pharma Finance Forum held in Lagos on the theme: “Manufacturing Renaissance in Nigeria’’.

“I urge the CBN to reduce the CRR of DMBs from 32.5 per cent to 10.0 per cent as similar to what is obtainable in Merchant Banks.

“That way, they defreeze cash for the banks to lend money to us rather than keeping that money with CBN,” says Pharma Akinjide Adeosun, the Chairman of St. Racheal Pharma.

He further underscored how this move could help them expand their businesses and improve the capacity of local manufacturing pharmaceutical companies.

Adeosun lamented that just about 30 per cent of pharmaceutical brands were manufactured locally, leaving only about 70 per cent for importation.

While noting that with about 80 per cent of inputs also being imported, he hinted, “There is the need for support to change the narrative, as we cannot constantly be dependent on others’’.

He also highlighted the significant role financial institutions played in the economy, especially in assisting businesses and sectors to grow.

Thus, Adeosun said it was time for the banks, notably, to support pharmaceutical manufacturing industries and the health sector in general.

“In so doing, challenging areas such as access to loan facilities need to be looked into,” adding, “Alongside, there has to be flexibility when it comes to loans and collaterals.”

The chairman also highlighted collaborations with the government to better grasp policies and smooth transition into aligning with policies.

He made a case for renewed hope, encouraging flexible credit terms, the realisation of a single-digit interest rate and a smooth transition to a possible 30 to 50 per cent of local manufacturing.

Adeosun, therefore, recommended free medical management palliative for indigent patients and assured national security through improved and large-scale local manufacturing.

Speaking on “The Renaissance of Nigeria’s Manufacturing Sector and the Role of Financial Institutions’’, the ED/Chief Finance Officer of Development Bank of Nigeria, Mrs Ijeoma Ozulumba, highlighted that only about 17 per cent of loans and advances had been made to the manufacturing industry in the country in recent years.

According to her, financial institutions had roles in helping grow the pharma manufacturing industry, including providing access to capital and investing and financing a speciality.

She listed Infrastructure Development, Power Supply, Transport and Logistics Enablement, Risk Management and Insurance, Export Financing, especially as the export share had been low, and Trade Facilitation.

Others are Capacity Building, Advisory Services, Support to SMEs, Industry Specific Financing Programmes and Policy Advocacy’.

Ozulumba assured stakeholders also that DBN would increase funding opportunities and access for improved economic control and development.

The Managing Director of PBR Life Sciences, Pharm. Ayodeji Alaran shared more insights on “Renaissance: The Size of the Pharmaceutical Opportunities in Nigeria”.

He described the pharma industry as a strategic one, providing medication and other sectors the support to strengthen the nation’s security and citizens’ health.

Alaran, however, called for immediate intervention to support local pharma industries.

In his words, COVID-19 further revealed the sector’s vulnerability and its high import dependency with an evident shortage of supply.

He said that amid challenges, the local industries significantly increased manufacturing as they demonstrated resilience and capacity to close gaps.

“So, if given the needed support, they will continue to grow,’’ he asserted.

Representing SANOFI, Mr Dimeji Abolade emphasised the need for full capacity utilisation of factories and human resources in the local pharma manufacturing industry.

CAPTION L-R: Divisional Head, Bank of Industry (BOI), Mr Ahmed Kagara; the Chairman of St. Racheal’s Pharma, Pharm Akinjide Adeosun; the Deputy General Manager of Ecobank, Pharm. Olanike Kolawole; and the CEO, Lefas Pharmaceuticals, Pharm. Lekan ASUNI at the St. Racheal’s Pharma Finance Forum in Lagos