The Centre for the Promotion of Private Enterprise (CPPE), Sunday commended the recent executive order removing import duties, value added tax (VAT), excise duty on pharmaceutical raw materials, intermediate products, medical diagnostic equipment and machineries.
President Bola Tinubu had signed an executive order to introduce zero tariffs, excise duties and value added tax on imported pharmaceutical inputs.
In a statement on Friday, Muhammad Ali Pate, the coordinating minister of health and social welfare, said the order was aimed at revitalising the Nigerian health sector and increase production of health care products.
The chief executive officer of the centre, Dr Muda Yusuf, in a statement yesterday noted that the measures would boost domestic production of pharmaceutical products, reduce the cost of medications, improve access to health care and impact positively on the wellbeing of citizens.
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He stated that this measure should be replicated in other sectors.
“It would also revitalise our pharmaceutical industries and create more jobs. Fiscal policy measures have better prospects of addressing supply challenges in the economy if well targeted. Boosting production is very vital to fixing the current inflationary pressures, driven largely by supply side challenges in the economy. Fiscal policy measures are potent tools for the realisation of this objective,” he added.
He recommended that the fiscal policy measures should be replicated to boost production in other segments of the real sector.
“We need similar executive orders for agriculture, agrochemicals and agro-allied industries to curb the surging food inflation. We need similar intervention in the energy sector to promote energy security and incentivise private investments in the sector. There is need for similar support for iron and steel sector to aid the construction industry and reduce construction costs for housing and infrastructure.
“We also need fiscal policy protection to support domestic investments in petroleum refineries to conserve foreign exchange, create jobs and deepen backward integration.
“There is a groundswell of economic nationalism globally and we should respond by strengthening our domestic production capabilities across all sectors.
“Fiscal policy measures have proven to be more impactful on real sector performance than monetary policy. The real sector of the economy deserves to be effectively protected and incentivised to improve production and ensure sustainability investments in that space.
“The Nigerian economy cannot afford to submit to a regime of complete trade liberalisation in the light of the challenges faced by domestic manufacturers. We need to stem the tide of deindustrialisation of the Nigerian economy, the exit of foreign direct investors and the rising mortality rate of domestic industries.
“We believe that stepping up fiscal policy interventions would facilitate the realisation of this objective. But we must be ready to trade off some revenue in the short term.
“The economy would be better off in the medium to long term, with regard to growth in domestic production, less import dependence, heightened prospects of disinflation, higher job creation and better economic resilience,” he also stated.
The CPPE also commended the Central Bank of Nigeria (CBN) for scrapping its Price Verification System Portal, which he said was a needless duplication of the functions of the Nigeria Customs Service and a product of a dysfunctional foreign exchange regime.
“We urge the CBN to sustain its engagement with the private sector for quality, evidence-based feedback on monetary policy outcomes,” the statement added.
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