Amid the spate of protests in some parts of the country following the rising cost of food, drugs and other basic requirements nationwide, Mr. Nnamdi Obi, Chairman/Chief Executive Officer, of Embassy Pharmaceutical and Chemical Company Limited, has weighed in on factors responsible for the situation and the necessary immediate and long term solutions to get Nigeria out of the woods. He spoke on various issues in this interview.


Your assessment of President Bola Tinubu’s economic policies-removal of fuel subsidy and unification of the exchange rates- and its effects on the pharmaceutical sector?

As a player in the sector, certain policies of the present government especially removal of so-called fuel subsidy on the day of its inauguration has greatly diminished Nigerians and the economy. Today, nobody including NNPC has expressly stated how much is the cost of moving fuel to any filling station in Nigeria. All the players in the industry who have bothered to appear on the national television have not been able to tell us how much does it cost us to supply fuel to respective filling stations or  the landing cost of a litre of fuel into the country? Most of the stakeholders in the industry have not expressly told us the cost. Former military Head of state, Major General (rtd) Buhari told us during the time of former president Jonathan that fuel subsidy was a fallacy. In fact, he asked then: Who is subsidising who? Professor David West, petroleum minister during the time of Babangida, also supported Buhari when he said there was no fuel subsidy in Nigeria. So we as Nigerians do not know who to believe at any point in time. Coming back to your question, when this removal of fuel subsidy was announced by President Bola Tinubu, the cost of fuel went up immediately by more than 200 percent, transportation fare went up and the rippling effects spread through the economy; prices of all other goods and services rose proportionately across the country. If we have a good rail system, it would have reduced the effects as a big chunk of the goods and services would have been transported by rail. Any trip by road to the North or West or eastern part of the country, the transport fare went up by more than 200 percent. That is one aspect of it. The second aspect of it as reported recently by PricewaterhouseCoopers (PWC), a global business advisory services firm was that the value of the Nigerian currency, the naira, had fallen by as much as 98 percent due to the decision of the Federal Government to collapse the foreign exchange market into a single Investors and Exporters (I&E) window in 2023. So if the currency had depreciated by 98 percent, your guess is as good as mine as what the prices of any pharmaceutical products or any other products whether manufactured locally or imported would be. Unfortunately, we have import dependent economy which we shouldn’t be proud of as a nation but because our leaders, past and present did not invest much in infrastructure; even the little they did, were not strategically located due to myopic political considerations. These wrong political and economic decisions are some of the reasons why we have so many unviable projects in the country resulting in huge local and foreign debts to the country. Let me tell you something, India built about 1600 of either ten- or twelve-lane expressway from Mumbai ( their commercial capital) to Delhi for $10 billion with a lot of services {hospitals, etc} provided along the line by individuals, not the state. How much does it cost us to build a kilometre of road in Nigeria? You will find funny costs 100 times the actual cost. If you ask me, the way we are going, our generation is going to have a better time than generations yet unborn. Except the modern gadgets, like telephones in our hands, our parents’ generations were better than ours, at least they could walk freely. When I finished my youth service, I did not fly from Lagos to Jos. I went by road. No person kidnapped me and night life was booming. So we decided to shoot ourselves in the foot by the misdeeds of our political leaders who to say the least are very wicked. I don’t want to single out any person but certain numbers of our political leaders are extremely selfish and wicked human beings. So how do you expect a drug to be cheaper? A drug you can import, five years ago, with about one hundred dollar, today it is about 1,000 dollars excluding the cost of clearing and freight to your destination. And is not going to get better. The unfortunate thing is that the minimum wage has not been reviewed. Even when it was reviewed last time, most

governments at the state level refused to implement claiming that they do not have the capacity. They utilize funds available on frivolous expenditure. So we are not serious as a nation. The most lucrative business in Nigeria today is either to be a politician or a kidnapper. When a young Nigerian looks up to a politician who buys a car for N160,000,000 (one hundred and sixty million naira) as model, the country’s future is doomed. In other climes, their politicians do not indulge in wasteful pillaging of state resources. Look at the British prime minister. He doesn’t have private jet. He flies British Airways. But in Nigeria, what will become news is when a local government chairman buys a private jet because some state governors have private jets. Mr. Peter Obi, former governor of Anambra State and Labour Party presidential candidate in 2023 February presidential election said something recently that a university professor who earns about N400,000 a month and does not touch that money for 30 years will not buy a car of one hundred and sixty million naira. Here, when our politicians get elected or selected with the help of powers-that be, he acquires a car of such amount. So our politicians got things twisted upside down. So as far as I am concerned, prices of drugs are not going to get better. Today, the black/parallel market price of a dollar is N1,470.

So, if the drug is imported and you add the cost of other ancillary services, then you can imagine the price. As a local production, the story is not different. Procter and Gamble has left, GlaxoSmithClineBecham has left because of very harsh economic conditions here. Most of the Indian pharmaceutical importers here have all left the country. Nigerian operators (manufacturers and importers) are staying because we don’t have a place to run to. Most of us are operating in very difficult circumstances. The only thing we can access locally is water; the rests (APIs, active pharmaceutical ingredients) are all imported at a cost. So, when you aggregate the costs of those imports plus local energy problem, you find out that the costs input is so high.

Stakeholders including some of your colleagues have advised the Federal Government to subsidise drugs for diabetics, hypertensive patients, etc to avoid unnecessary/preventable deaths that might be caused as result of increasing inability of this category of Nigerians to afford their regular drugs. What is your position?

I subscribe to that. In fact, the Federal Government should do something similar to what former military Head of state,  late Gen. Sani Abacha did through PTF (Presidential Task Force) that was headed by another former military Head of state, Maj. Gen Buhari (RTD). What the government did then was to procure drugs and distribute them across the length and breadth of this country. This should be devoid of any political consideration. Political considerations were the yardsticks used by PTF to distribute the drugs and other essential materials then. That was why PTF drugs did not get to certain parts of the country where they were needed most. Some were dumped somewhere and got expired when it was needed in some other parts of Nigeria. So, I strongly advise President Tinubu/Federal Government to urgently make money available to the ministry of finance/health to intervene in the areas listed-hypertension, diabetes to be distributed across the length and breadth of Nigeria devoid of political consideration. The recent intervention in the area of palliatives to cushion the effect of removal of fuel subsidy was more or less a political move. It was full of partisan consideration which favoured mostly members of major political parties in the country.

What other operating costs, in specific terms, were affected by subsidy removal and collapse of exchange rate into a single window?

Cost of Diesel is still very high and most often than not, we operate on generators. We have to pay workers their salary. Our company operates at a very high cost and the pharma sector is not such you can adjust the price easily. Churches are flourishing because people prefer to look for healing in the church than pay for high cost of drugs. If you have malaria, for instance, you have to buy antimalarial or see your doctor not prayer and faith only. If you have any ailment, you have to buy the required drugs as prescribed by the right authorities in order to get better. It is not only by faith. Moreover, we are in a sector where there is shelf life for every item and when those drugs expire in your hands, you have to pay the relevant authorities to destroy them. Our tax policies need to be reviewed to encourage producers and importers of pharmaceutical products. As our president goes about canvassing for foreign investments, the foreign investors are also watching how you treat local investors through their various embassies. They have their high commissioners here even when the president has long gone or returned from the foreign trip, they will ask their embassies about the business environment. No business investment is taken based on sentiments because you must get return on investments. So, it behoves on us to do what is right internally. Insecurity in the country has not been helping matters. It has contributed in the spike of prices of many products. Even in food items. Benue/Plateau area is regarded as the food basket of the country. Potatoes, yam, etc we consume in this country are from there. Look at the current prices of these items all because of bandits ravaging the states almost on regular basis. People in some local government areas were sacked and the people occupying the sacked communities cannot farm. So cultivable lands continue to shrink on a regular basis. So, what do you expect to happen to prices of agricultural produce and finished products? So, it is a vicious circle that does nobody any good. Unless we are able to address myriads of challenges confronting us in the country, the economy won’t get better.

Related News

Has the high cost of drugs led to increase in fake drugs?

Of course but NAFDAC ably led by Prof. Adeyeye, is doing a wonderful job in terms of tracking and destroying some of the fake drugs. The fact that we have porous borders over 1,000 un-maned borders as admitted by even immigration agency have not helped matters. During last election, I watched as bamboos and unused tyres were used to close our borders. That is very laughable. I cannot place a figure on the percentage but NAFDAC as I said earlier is trying. But note that there’s no part of the world where you don’t have fake even in United States of America. What we are saying is that it should be reduced to the barest minimum. The issue of fake products, in general happen because of the propensity of crooked individuals to enrich themselves at the expense of their communities. And here we like to celebrate anybody that has money no matter the circumstances.

Advice to for remedial actions?

I would rather advise government on the areas I have core competence that would impact business especially in the pharma sector. Today, prices of drugs are high because of various factors. But if you address the issue of high tariff, what government sometimes calls levy, for instance, government on one hand will say zero duty for imported products but 20 percent levy which is as good as saying 20 percent duty because what you give with the right hand, you collect with left. That has to be addressed. For imported raw materials and equipment, machinery there should be zero duty. Let’s encourage manufacturers to start producing things here. And it is not the duty of Customs to take this decision. Government should take this decision because Customs is interested in meeting the revenue target set by government. So government must know what it wants. Is it that government wants to make so much money while the citizens are dropping dead in the streets? Please, I am not saying that all the goods coming into the country should enjoy zero duty but there are certain areas that government must subsidize. Health and food items are so essential. We are still a nation that cannot feed itself and provide very affordable, accessible/available and efficacious drugs which are part of the guaranteed human rights. So, there has to be zero duty on machinery, zero duty on raw (finished) materials, zero duty on APIs (Active Pharmaceutical Ingredients), zero duty on excipients, zero duty on all finished pharmaceutical products, let’s say for 10year-period. So, that those who are importing will now transit into manufacturing. We all want a robust economy but where we have a deficit of infrastructure as we have presently, it becomes difficult to achieve that without targeted support to certain sectors by the government.

What about bad road network and traffic congestion?

It’s not only for the importers. It affects everybody doing business. For instance, if Dangote can transport Dangote cement through the rail to almost any part of the country, don’t you think the price of cement will become cheaper? Same applies to pharmaceutical products. But if I have to pay N700,000 to take my consignment from Apapa wharf to my warehouse in Lagos Island or mainland, all within Lagos, guess what it cost to transport it to the North or East. This is something the Federal Government has to look into because it doesn’t help the business to leave charges at the port to the discretion of agencies/operators/shipping lines, if you want prices to come down. This is more important than throwing palliatives to the people. So, it has affected prices of drugs as much as it has affected prices of other commodities. So, government has to be sincere when they want to address the infrastructural deficit we have in the country. For instance, if you do a rail from one part of the country, the project must be viable. It must be such that the project must repay itself. You don’t have to construct a rail line that leads to nowhere. It must be so viable as to repay the loan in reasonable period. That’s how they do it in civilized countries of the world. If you do a rail line from Lagos to Port-Harcourt through Onitsha and Benin, it would repay its cost within reasonable period of time because of the level of business activities. Imagine linking major cities, all state capitals through rail and with our population going to over 200 million, we can make so much through internal trade. That is what India and China are doing, developing their infrastructure and empowering their people to have enough disposal income to trade among themselves.

The Japa syndrome has taken a large chunk of members of your profession and even in medicine out of the country. What advice or suggestion do you have for government in order to checkmate it?

If you see a place where you can easily secure a job and that job guarantees decent meals in a secure environment, won’t you prefer to be there? This japa syndrome will work effectively for our country if we adopt the India Model. India years back had so much of Indian professionals outside India. When their economy was so bad, they did the same thing Nigerian youths are doing now- leaving the country in numbers. But later, they had a serious government that addressed most of their critical economic issues. They started coming back to India, their currency acquired value ensuring a reasonable standard of living. That is why today in my own area of practice, there’s no specialty in medicine you won’t have excess manpower. I got my comprehensive health check and paid only

$150, about 1,500 rupees. It has been like that for the past five years. So, Japa is going to be a blessing to us if we can fix our economy and address insecurity challenges here. They will come back and whatever professional knowledge acquired then will be useful in transforming our economy. So, the concern of government now should be focused on fixing the economy. They would return when this is done without anybody prompting. That’s what happened to India. That is why if you go to any hospital in India you have a plethora of professionals in medicine who have proved their mettle internationally. They might not be earning millions of dollars but what they get is enough to meet their basic requirements and still have savings. So Japa is going to pay us later but we must have to do first things first-address the pressing challenges-infrastructure deficit, insecurity, energy and so on.