COVID-19: CBN, Bank Chiefs Boost Domestic Drugs’ Production With New Funding Package
BY CHINYERE OBIORA, LAGOS – Amid criticisms of belated response in Nigeria’s commitment to address the agonising sufferings caused by the Coronavirus scourge globally, the Central Bank of Nigeria (CBN) and Bankers Committee are offerng financial succour to pharmaceutical and related companies for the procurement of raw materials and equipment to boost local drugs’ production in the country.
This health sector-focused funding facilities, packaged both in Naira and foreign exchange components, are meant to improve local capacity and make Nigeria self-sufficient in drug manufacturing.
Rising from their extraordinary meeting in Lagos at the weekend, CBN Governor, Godwin Emefiele said through policy combination measures, about N3.5 trillion will be injected as stimulus package to ameliorate the negative impact of Covid-19 in the health sector and Nigeria’s economy.
He said particular attention is being paid to Nigeria’s health industry because “this crisis is first and foremost a public health crisis.
“As aforementioned, global supply chains have been disrupted including dominant drug supply channels from China and India. In fact, many countries have or are planning to ban the export of drugs and medical supplies from their countries. Clearly, we have no choice but to produce these items locally.”
According to the CBN Governor, the Bankers Committee has identified few key local pharmaceutical companies to be granted Naira and foreign exchange funding facilities to support procurement of raw materials and equipment required to exponentially increase local drugs production in Nigeria.
He stated that some of these pharmaceutical companies include but not limited to Emzor, Fidson, GSK, May and Baker, Unique Pharma, Swiss Pharma, Neimeth Pharmaceuticals, Orange Drugs, Sagar, and Dana Pharma among others.
Offering further insight on the funding plans, Emefiele said given significant disruption of the global supply chains, the Bankers Committee has advised Nigerians and companies to prioritize “their import needs and focus more on sourcing raw materials and inputs locally.”
The Committee noted the success of CBN’s 43 items policy and encouraged the apex bank to strengthen it as well as other measures targeted at export promotion and import substitution to position Nigeria not only as a key global producer but also build a self-sufficient economy.
Emefiele said having learnt lessons from previous crisis, including the 2008 global financial crisis and the oil price slump of 2016, the banking industry, as applicable, will position itself to better deal with the current economic crisis.
He said the industry has also resolved that profit would not be the primary motive at this time, but rather preserving confidence, financial stability and support for the economy are to serve as the overriding objectives.
The apex bank boss further said there would be engagement with correspondent banks, trade creditors, trading partners regarding existing LC and trade commitments.
This new development is in addition to earlier policy measures by the CBN that gave additional moratorium of one year on its intervention facilities; interest rate reduction on intervention facilities from nine to five per cent; creation of N50 billion targeted credit facility to affected households and SMEs; and granting regulatory forbearance to banks to restructure terms of facilities in affected sectors.
Others include: activation of the N1.5 trillion infraCo Project for building critical infrastructure; additional N100 billion intervention in healthcare loans to pharmaceutical companies anf health practioners intending to expand/ build capacity; and N1 trillion loans to boost local manufacturing and production across critical sectors of the economy.
