Experts in the Nation’s Pharmaceutical Industry have commended the Central bank of Nigeria (CBN) in efforts to boost the growth of the sector through its provision of the N100 billion Health Sector Intervention fund.
They however urged the CBN to look into the provision of foreign exchange for manufacturers and also grant a two year moratorium as against the one year stated in the guideline for accessing the facility.
Speaking at a virtual conference organized by Finance Correspondents Association of Nigeria (FICAN) in Lagos recently, pharmaceutical industry stakeholders testified that many operators and other healthcare entrepreneurs in the sector already have accessed the fund while others have received approvals to access the facility.
President of the Pharmaceutical Society of Nigeria (PSN) Mr. Sam Ohuabunwa while thanking the CBN for the initiative, appealed for the provision of special foreign exchange allocations for beneficiaries of the facility as it would go a long way enabling operators in the sector import what is needed to boost their production capacity.
According to him, the challenge of inflation and depreciation of foreign Exchange poses a threat to proper utilization of the funds and as a result, manufacturers should not be forced to go through the ordeal of accessing Forex on the parallel market.
“We have also requested CBN to make a special provision for pharmaceutical industry and other healthcare entrepreneurs who have taken advantage of this healthcare and pharmaceutical fund to provide forex directly for them. He also asked for elongation of the moratorium from one year to two years
“CBN should not allow the manufacturers struggle with banks to look for forex because anything worth doing is worth doing well,” he appealed.
In the circular, CBN had set guidelines for accessing the N100 billion intervention fund for the health sector. According to the apex bank, N2 billion was set as maximum obligor limit for term loans while companies seeking working capital can get a maximum of N500 million.
Specifically, each company will be eligible to take loans amounting to 20% of the average of three year’s turnover.
“Interest rate under the intervention shall be at not more than 5.0% per annum. (All-inclusive) up to February 28, 2021, and thereafter, interest on the facility shall revert back to 9% p.a. (all-inclusive) as from March 1st 2021.”
Working capital shall be for a maximum period of one year, with provision for rollover not more than three years.
Term loan shall have a maximum tenor of not more than 10 years with a maximum of a one-year moratorium on repayment. However, in case of construction, the tenor shall be determined by the completion date.
In the document issued by Director, Development Finance Department, the fund was created as part of proactive measures to cushion the impact of the coronavirus (COVID-19) pandemic on the economy, introduced a N100 billion credit support intervention for the healthcare industry.
It is with a view to strengthening the sector’s capacity to meet the potential increase in demand for healthcare products and services. Specifically, the scheme is to provide credit to indigenous pharmaceutical companies and other healthcare value chain players intending to build or expand capacity.
According to the apex bank: “The Scheme is expected to increase private and public investment in the healthcare sector, facilitate improvements in healthcare delivery and reduce medical tourism to enhance foreign exchange conservation.”