Multinational firms leaving Nigeria due to naira fluctuations, say pharmaceutical manufacturers

The Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN) has expressed concerns over the scarcity of foreign exchange (FX)  in Nigeria.

PMG-MAN spoke during a news conference in Lagos ahead of the 7th Edition of the Nigeria Pharma Manufacturers Expo (NPME).

According to the association, it is impossible for pharmaceutical companies to cope, adding that the forex scarcity led to the exit of several multinational pharmaceutical companies in the country.

Speaking at the conference, Patrick Ajah, chairman of the local organising committee for NPME 2024, said a stable exchange rate is crucial for the progress of the domestic pharmaceutical industry.

Ajah, the managing director of May & Baker, also highlighted the challenges posed by the fluctuating value of the naira, which has deterred investment and planning within the industry.  

“Unless the value of the naira is stabilised, achieving the country’s target of 70 percent local drug manufacturing will remain a mirage,” he said.

“The recent fluctuations in the value of the naira have made it difficult for companies to plan and invest. 

“This is one major reason why multinational companies are leaving. It’s not the fear of subsidy removal.

“If we didn’t tamper with the currency, all the multinational companies would be here, and they would still be making more investments.”

Ajah added that the recent fluctuations have made it nearly impossible for companies to cope, forcing many multinationals to withdraw.

“Many companies are not able to cope. So, fixing our exchange rate is going to be the one single thing that will immediately reset where we are,” he added.

Ajah also highlighted the recently signed executive order by President Bola Tinubu, which removes tariffs and value-added tax (VAT) on pharmaceutical imports, which is yet to take effect.

He, however, called for the government to implement additional measures, including fixing the exchange rate, to attract and retain multinational investments.

On May 1, Frank Muonemeh, executive secretary of PMG-MAN, said the country should reduce its dependence on imported drugs.

Muonemeh said Nigeria must prioritise locally produced drugs over imported medicines.

He also said the production of local medicines must be taken as a national security issue.

In 2023, prominent pharmaceutical multinationals, such as GlaxoSmithKline (GSK) and Sanofi Nigeria Limited stopped operations in the country, citing the forex crisis.  

While GSK ended its 51-year presence in Nigeria in August 2023, Sanofi exited in November last year.