The Nigeria Customs Service (NCS) has announced a two-year exemption from import duties and Value Added Tax (VAT) for critical raw materials required in the production of pharmaceuticals. This move, which is part of President Bola Tinubu’s broader strategy to boost local manufacturing, aims to reduce the cost of producing essential medicines and medical supplies, while also stimulating investments in the country’s pharmaceutical sector.
In a statement released on Wednesday, the NCS disclosed that the exemption, which has been granted under a presidential executive order, will apply to essential raw materials like Active Pharmaceutical Ingredients (APIs), excipients, long-lasting insecticidal nets, rapid diagnostic kits, reagents, and packaging materials. This initiative is expected to help reduce the financial burden on pharmaceutical manufacturers and, ultimately, bring down the cost of medical products for Nigerian consumers.
The decision to grant the exemption comes as part of Nigeria’s ongoing efforts to enhance local manufacturing capabilities in the pharmaceutical sector. The government aims to reduce the reliance on imported drugs and medical supplies, thereby promoting self-sufficiency in the healthcare industry.
Assistant Comptroller Abdullahi Maiwada, the NCS National Public Relations Officer, emphasized that the exemption is in line with presidential directives aimed at stimulating local production, reducing the cost of healthcare products, and encouraging investments in Nigeria’s pharmaceutical sector.
“Drawing from Presidential directives aimed at enhancing local manufacturing of healthcare products, reducing the costs of medical equipment and consumables, as well as stimulating local investments, the Nigeria Customs Service is pleased to announce that critical raw materials essential for the production of pharmaceutical products will be exempted from import duties and VAT for a period of two years,” said Maiwada.
This exemption applies to essential raw materials, such as Active Pharmaceutical Ingredients (APIs), excipients (inactive substances used in drugs), long-lasting insecticidal nets, rapid diagnostic kits, reagents, and packaging materials. These materials are crucial for the production of a wide range of pharmaceutical products, including essential medicines and medical diagnostic tools.
The Nigerian government’s move to grant this exemption is seen as a step towards strengthening the nation’s healthcare infrastructure. With the exemption in place, local pharmaceutical companies are expected to see a reduction in production costs, which could make essential medicines more affordable for Nigerians.
The availability of cheaper pharmaceuticals could also help address the problem of drug shortages in some areas of the country, which has long been a challenge for Nigeria’s healthcare system. Furthermore, by providing fiscal relief to local manufacturers, the government hopes to create an environment conducive to more investment in the pharmaceutical sector, driving economic growth and creating jobs.
Long-lasting insecticidal nets (LLINs), a key product in the fight against malaria, will also benefit from the exemption. Malaria remains a leading cause of death in Nigeria, and the production of these nets locally is expected to reduce their cost, making them more accessible to the population.
Similarly, rapid diagnostic kits and reagents, which play a crucial role in detecting diseases like malaria and COVID-19, will also be covered by the exemption. This will enhance Nigeria’s ability to respond to public health emergencies and improve diagnostic capacity nationwide.
To ensure that the exemption benefits only legitimate pharmaceutical manufacturers, the NCS has set clear eligibility criteria. Only manufacturers that are recognized by the Federal Ministry of Health and Social Welfare will be eligible for the exemption. Additionally, these manufacturers must possess a valid Tax Identification Number (TIN).
This measure is designed to ensure that the benefits of the exemption are directed toward legitimate and registered companies, preventing abuse of the policy and ensuring that the fiscal relief helps strengthen Nigeria’s healthcare infrastructure.
The NCS has also committed to maintaining transparency and effective monitoring of the policy’s implementation. As part of this commitment, the NCS will compile quarterly reports that will provide detailed information about all imports made under the exemption, including data on importers, quantities, and values of the raw materials imported.
By publishing these reports, the NCS aims to ensure that the policy is being implemented effectively and in line with its objectives. The data will also help ensure that the exemption is being used to support local manufacturers and reduce the costs of medical products for Nigerians.
The NCS has highlighted that the successful implementation of this policy will require collaboration from various stakeholders, including pharmaceutical manufacturers, importers, and relevant government agencies. The NCS called for cooperation from all parties involved to ensure that the policy achieves its intended goals of reducing the cost of healthcare products and boosting local production.
“Successful implementation of this policy requires collaboration from all stakeholders, including importers, manufacturers, and relevant government agencies,” the statement read. “Through our collective efforts, we can achieve the shared goal of a robust healthcare sector that meets the needs of all Nigerians.”
The exemption is expected to have a significant impact on Nigeria’s pharmaceutical industry, which has long faced challenges such as high production costs, reliance on imported raw materials, and drug shortages. By reducing the cost of key raw materials, the policy will help local pharmaceutical manufacturers compete more effectively with imported products, potentially driving down prices and improving access to medicines for Nigerian consumers.
In addition to benefiting manufacturers, the exemption is also expected to encourage foreign and local investments in the pharmaceutical sector. With lower production costs, Nigerian pharmaceutical companies will be in a better position to attract investors who are interested in tapping into Nigeria’s large healthcare market.
By fostering local manufacturing, the government hopes to reduce Nigeria’s dependence on imported drugs and medical supplies. This would not only improve the availability and affordability of healthcare products but also contribute to the country’s economic development by creating jobs in the pharmaceutical manufacturing sector.
The NCS has reiterated its commitment to supporting government policies aimed at promoting national development, particularly in the healthcare sector. In its statement, the Customs Service emphasized its role in facilitating trade, enhancing border security, and driving economic growth. By supporting the government’s efforts to reduce the cost of healthcare products and boost local manufacturing, the NCS aims to contribute to the overall development of the country.
The policy reflects the Nigerian government’s ongoing commitment to improving the healthcare sector and ensuring that essential medicines and medical supplies are more affordable and accessible to all Nigerians. By providing fiscal relief to local manufacturers, the government is working to build a more self-sufficient pharmaceutical industry that can better meet the needs of the Nigerian population.
