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The Executive Order aims to exempt tax from essential medical products in Nigeria seeking to enhance affordability, promote local production, and address critical healthcare needs within the country. This strategic move aligns with the Presidential Value Chain Initiative (PVAC_NG) inaugurated by President Tinubu in October 2023 as a cornerstone of the Renewed Hope Agenda, fostering economic growth and ensuring accessible healthcare for all.
Which products are beneficiaries of the New Order?
The following items benefit from the executive order
1. Active Pharmaceutical Ingredients (APIs): These are fundamental components used in drug formulation e.g. Advil: Ibuprofen, Benadryl: Diphenhydramine, Claritin: Loratadine, Mucinex: Guaifenesin, Neosporin: Bacitracin, Pepcid AC: Famotidine, Prilosec: Omeprazole, Tylenol: Acetaminophen etc.
2. Excipients: Essential additives that enhance drug stability, absorption, and overall efficacy.
3. Other Raw Materials:
a. Medical Textiles: Materials for wound dressings, surgical gowns, and other medical fabric products.
b. Needles and Syringes: Vital for administering medications and vaccines.
c. Long-lasting Insecticidal Nets (LLINs): Crucial in malaria prevention.
d. Rapid Diagnostic Kits: Essential for timely disease detection and management
Implementation and Market-Shaping Mechanisms
1. Framework Contracts: These contracts encourage local manufacturers by providing stability and predictability in procurement.
2. Volume Guarantees: By guaranteeing a certain volume of orders, the order incentivizes local production.
3. Collaboration between Ministries: The order mandates collaboration between the Ministries of Health, Finance, and Industry, Trade and Investment. They will work together to develop a harmonized implementation framework. This framework aims to expedite regulatory approvals and reduce bottlenecks in the healthcare sector.
4. Swift Implementation: Relevant agencies, including the Nigeria Customs Service, National Agency for Food and Drug Administration and Control (NAFDAC), Standard Organisation of Nigeria (SON), and Federal Inland Revenue Service (FIRS), is to ensure swift implementation. Special waivers and exemptions will be effective for two years while importers benefit from reduced costs during this period.
5. Impact: The order aims 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
In conclusion, this Executive Order represents a pivotal step towards a healthier, more resilient Nigeria. It converges seamlessly with the Presidential Value Chain Initiative (PVAC_NG), reinforcing our collective commitment to accessible healthcare for every citizen. Beyond health outcomes, the economic ripple effects are substantial, positioning Nigeria for sustainable growth and prosperity.
Reference/ Citation
https://guardian.ng/tinubu-signs-executive-order-to-eliminate-tariffs-on-pharmaceutical-inputs/
