President Bola Tinubu has issued an executive order aimed at eliminating tariffs, excise duties, and value added tax (VAT) on imported pharmaceutical inputs in Nigeria.
In a statement released on Friday, June 28, Muhammad Ali Pate, the Coordinating Minister of Health and Social Welfare, highlighted that the order is designed to rejuvenate the Nigerian health sector and stimulate the local production of healthcare products.
"In a transformative step to rejuvenate the Nigerian health sector, His Excellency President Bola Ahmed Tinubu, GCFR, has signed an Executive Order aimed at boosting local production of healthcare products such as pharmaceuticals, diagnostics, medical devices (including needles and syringes), biologicals, medical textiles, and more," Pate stated.
Pate further noted that the Minister of Justice and Attorney General of the Federation, Prince Lateef Olasunkanmi Fagbemi SAN, will proceed with formalizing the new Order.
The executive order is integral to the success of the Health Care Value Chain Unlocking Initiative (PVAC_NG), approved by the president in October 2023.
"The Order introduces zero tariffs, excise duties, and VAT on specified machinery, equipment, and raw materials, with the aim of reducing production costs and enhancing the competitiveness of our local manufacturers," Pate explained. "Specified items include Active Pharmaceutical Ingredients (APIs), excipients, and other essential raw materials necessary for manufacturing critical health products such as drugs, syringes, needles, Long-lasting Insecticidal Nets (LLINs), and Rapid Diagnostic Kits."
Furthermore, the Order includes provisions for establishing market-shaping mechanisms like framework contracts and volume guarantees to incentivize local manufacturers.
To ensure effective implementation, the order mandates collaboration among the Ministers of Health, Finance, and Industry, Trade, and Investment to develop a streamlined implementation framework aimed at expediting regulatory approvals and reducing bureaucratic hurdles.
Pate highlighted that agencies including the Nigeria Customs Service (NCS), National Agency for Food and Drug Administration and Control (NAFDAC), Standard Organisation of Nigeria (SON), and Federal Inland Revenue Service (FIRS) will oversee swift implementation, with special waivers and exemptions in effect for two years.
"The implications of this order are a strategic shift towards market-driven incentives to promote medical industrialization, lower costs of medical products through import substitution, foster economic value creation, and facilitate job opportunities across the healthcare value chain," the minister concluded.
Pate expressed gratitude to President Tinubu for his leadership and dedication to placing Nigeria on a path to prosperity, acknowledging the collective effort that led to this significant milestone.
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