Pharmaceutical industry operators in the country are seeking a review of the terms and conditions for accessing and repaying the N100 billion Central Bank of Nigeria’s (CBN) Health Sector Support Facility as they contend with scarcity of foreign exchange (FX) and other fiscal challenges in their operations.
The N100 billion credit support intervention fund is part of proactive measures to cushion the impact of the Coronavirus (COVID-19) pandemic in Nigerian economy.
The President of the Pharmaceutical Society of Nigeria (PSN), Mazi Sam Ohuabunwa, who raised the operators’ concerns on Wednesday, said beneficiaries of the funds had now been placed in a position that they are unable to generate necessary cash flow to meet the debt obligation and repay the loan based on the terms and conditions for accessing the fund.
The industrialist, who spoke during the Finance Correspondents Association of Nigeria (FICAN) workshop with theme “ Nigeria manufacturing sector and CBN N100 billion Healthcare intervention fund, opportunities, challenges and post Covid-19 expectations”, appealed to the federal government and the CBN to extend the moratorium, cut interest rate and extend repayment period of the fund.
According to him, while the fund represents a boost to the health care manufacturing sector in terms of boosting the sector’s productivity and enhance employment through expansion of production lines, the prevailing factors have become a major drawback to achieving the objectives of the funds.
Ohuabunwa, who commended the government on the N100 billion intervention fund, lamented that beneficiaries of the fund were currently battling with challenges of securing foreign exchange to pay for the healthcare equipment tied to the funds to enhance expansion and boost productivity.
He pointed out that the problem associated with foreign exchange scarcity was further compounded by the divergent rate FX obtainable, instability of the rates and devaluation of the; local currency which has further watered down the value of the funds assessed by pharmaceutical manufacturing firms.
The PSN president affirmed that while the moratorium for the fund is pegged at one year, with single digit interest rate, and factoring challenges posed by the prevailing economic condition, and canvassed the need for the monetary authorities (CBN) to reconsider extending the moratorium period to two years, further drop the interest rate and extend the debt repayment period.
The industrialist further appealed to the CBN to make special FX provision for the health sector to enable the operators use the borrowed funds for importation of critical equipment.
He pleaded: “Give us direct FX line instead of leaving us to the mercy of the commercial banks.
“We have always have issues of FX in the country, when you are given N1billion or N2 billion, you are given one year to begin to meet obligation. CBN need to make a special allocation of FX to all beneficiaries of the fund.
“If we are not able to start converting the fund to FX, FX losses, depreciation and inflation will eat up the funds. Factor this in and provide us with buffer. Extend the moratorium to two year and extend the repayment period”, Ohuabunwa added.