LCCI: Removal of Tariffs, Others on Pharmaceutical Raw Materials Will Boost Drug Manufacturing

Dike Onwuamaeze

The Lagos Chamber of Commerce and Industry (LCCI) is optimistic that the recent Executive Order that introduced zero tariffs, excise duties, and Value-Added Tax (VAT) on imported pharmaceutical inputs would revitalise manufacturing of drugs in Nigeria.

The LCCI express this hope in a press statement, which described the Executive Order as a bold move that aligned with the broader initiative to unlock the healthcare value chain with emphasis on the revitalisation of local drug manufacturing.

The Director General of LCCI, Dr. Chinyere Almona, said, “By significantly reducing production costs, this initiative will enhance the competitiveness of local manufacturers” following the recent exit of some pharmaceutical firms from Nigeria that “has made drug availability difficult, leading to higher costs of medications. This policy intervention has come at a good time.”

The LCCI also acknowledged that eliminating taxes on crucial inputs would pave the way for a revitalised local pharmaceutical industry and improved access to affordable healthcare products.

It pointed out that countries like India and China have successfully implemented similar policies and have become major drug manufacturing hubs in their regions.

“Nigeria’s new directive should align with these successful models to enhance local manufacturing capacity and reduce import dependency,” the chamber said.

It added, “This Executive Order as a transformative policy measure. The chamber believes it will boost domestic production, reduce medication costs, improve healthcare access, create jobs, revitalise Nigeria’s pharmaceutical industry, and improve Nigeria’s Human Development Index (HDI).

“It marks a significant shift towards market-based incentives, encouraging medical industrialization and reducing reliance on imports. The LCCI remains committed to supporting initiatives that foster economic growth and improve the quality of life for all Nigerians.”

Almona said that the successful implementation of this order required close collaboration among the relevant Ministries, Departments and Agencies (MDAs).

She said: “A harmonised implementation framework should be developed to ensure efficient execution. Agencies such as the Nigeria Customs Service, NAFDAC, Standard Organisation of Nigeria and Federal Inland Revenue Service should create a smooth operational environment, eliminating bureaucratic delays and bottlenecks.”

She also said that 70 per cent of the country’s pharmaceutical needs are being met through imports, which she attributed, “to limited local production capacity and various challenges in the sector such as high production costs and regulatory hurdles.

“If sustained, this policy can position Nigeria as a drug manufacturing hub for sub-Saharan Africa, leveraging the African Continental Free Trade Area (AfCFTA) to expand drug exports across the continent. Local manufacturers can also sign supply contracts and franchisee arrangements with leading exporters from India, China, and Europe.”

The LCCI said that its Medical and Pharmaceuticals Group that comprised long-standing drug manufacturers have been operating under a very harsh business environment, especially regarding the importation of critical inputs for production, harassment from regulatory authorities, and high costs of logistics moving across the country.

“We therefore urge the government to pay attention to research and development, cross-country logistics, insecurity, and market access to the African continent,” it said.