President Bola Tinubu has signed an executive order introducing zero tariffs, excise duties, and Value-Added Tax (VAT) on imported pharmaceutical inputs, according to a statement by the Coordinating Minister of Health and Social Welfare, Muhammad Ali Pate.
The order targets specified machinery, equipment, and raw materials imported for pharmaceutical production, aiming to revitalize Nigeria’s health sector.
The Minister of Justice and Attorney General of the Federation, Prince Lateef Olasunkanmi Fagbemi SAN, is tasked with codifying the new order.
Pate emphasized the order’s importance for the success of the initiative to unlock the healthcare value chain (PVAC_NG), which was approved by the president 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,” he stated.
Specified items include Active Pharmaceutical Ingredients (APIs), excipients, and other essential raw materials required for manufacturing crucial health products like drugs, syringes and needles, Long-lasting Insecticidal Nets (LLINs), and Rapid Diagnostic Kits.
The order also calls for establishing market-shaping mechanisms such as framework contracts and volume guarantees to encourage local manufacturers.
Additionally, it mandates collaboration among relevant ministries and agencies, including the Nigeria Customs Service (NCS), National Agency for Food and Drug Administration and Control (NAFDAC), Standard Organisation of Nigeria (SON), and Federal Inland Revenue Service (FIRS), to ensure swift implementation and reduce regulatory bottlenecks.
Pate highlighted that the order provides market-based incentives to encourage medical industrialization, reduce costs of medical products through import substitution, create and retain economic value, and enable job creation in the healthcare value chain. The waivers and exemptions will be effective for two years.