President Tinubu Signs Executive Order to Remove Tariffs on Pharmaceutical Imports, Boosting Nigeria's Health Sector

President Bola Tinubu has signed an executive order to eliminate tariffs, excise duties, and value-added tax (VAT) on imported pharmaceutical inputs. On Friday, Muhammad Ali Pate, the coordinating minister of health and social welfare, announced that this move is designed to rejuvenate Nigeria's health sector and boost the production of healthcare products.

"In a transformative move to revitalize the Nigerian health sector, His Excellency President Bola Ahmed Tinubu, GCFR, has signed an Executive Order to increase local production of healthcare products such as pharmaceuticals, diagnostics, devices like needles and syringes, biologicals, and medical textiles," stated Pate.

He added that the Minister of Justice and Attorney General of the Federation, Prince Lateef Olasunkanmi Fagbemi SAN, @LOFagbemi, will proceed with the codification of the new Order. Pate emphasized that this order is essential for the success of the healthcare value chain initiative (PVAC_NG), which the president approved in October 2023. "The Order introduces zero tariffs, excise duties, and VAT on specified machinery, equipment, and raw materials, aiming to reduce production costs and enhance our local manufacturers’ competitiveness," Pate noted.

The specified items include Active Pharmaceutical Ingredients (APIs), excipients, and other essential raw materials needed for the production of critical health products like drugs, syringes, needles, Long-lasting Insecticidal Nets (LLINs), and Rapid Diagnostic Kits. "The Order also establishes market-shaping mechanisms, such as framework contracts and volume guarantees, to support local manufacturers," Pate explained.

He highlighted that the order mandates collaboration among the ministers of health, finance, and industry, trade, and investment to develop a harmonized implementation framework, expedite regulatory approvals, and reduce bottlenecks. Pate mentioned that agencies like the Nigeria Customs Service (NCS), National Agency for Food and Drug Administration and Control (NAFDAC), Standards Organisation of Nigeria (SON), and Federal Inland Revenue Service (FIRS) "will ensure swift implementation, with special waivers and exemptions effective for two years."

"The implication of this order is a pivot towards market-based incentives to encourage medical industrialization, reduce the costs of medical products through import substitution over time, create and retain economic value, and enable job creation in the healthcare value chain," Pate remarked. He thanked President Tinubu for his courage and commitment to steering Nigeria back onto the path to prosperity.

He also expressed gratitude to everyone who contributed to the ideas that culminated in the consensus leading to this significant milestone.

This development follows an appeal sent by TheCable on May 23 to President Tinubu and other political leaders, urging policy and legislative actions on the escalating cost of medications, also known as "drugflation."

The publication highlighted key proposals from its webinar held in April 2024 in the appeal, requesting the approval of a clear executive order to address the identified health sector issues and encourage support for local manufacturers.