Reactions As Tinubu Pens Executive Order To Introduce Zero Tax On Imported Pharmaceutical Inputs

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By Nwosa Hamilton 

In a dramatic move, President Bola Ahmed Tinubu on Friday signed an executive order to implement a policy of zero tariffs, excise duties, and value-added tax (VAT) on imported pharmaceutical inputs.

This was revealed in a statement issued by the coordinating minister of health and social welfare, Muhammad Ali Pate.

In the statement, Pate explained that the order is aimed at revitalising the Nigerian health sector and increasing the production of healthcare products.

He added that the order is crucial to the success of the initiative for unlocking the healthcare value chain (PVAC_NG), which was approved in October 2023 by the president.

The statement reads in part: “In a transformative move to revitalize the Nigerian health sector, His Excellency President Bola Ahmed Tinubu, GCFR @officialABAT, has signed an Executive Order aiming to increase local production of healthcare products (pharmaceuticals, diagnostics, devices such as needles and syringes, biologicals, medical textile, etc.),” Pate said.

“The Minister of Justice and Attorney General of the Federation @FedMinOfJustice, Prince Lateef Olasunkanmi Fagbemi SAN, @LOFagbemi, is to now take the next steps towards codifying the new Order.

“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 said.

“Specified items include Active Pharmaceutical Ingredients (APIs), excipients, other essential raw materials required for manufacturing of crucial health products like drugs, syringes and needles, Long-lasting Insecticidal Nets (LLINs) and Rapid Diagnostic Kits, among others.

“The Order also provides for establishing market-shaping mechanisms such as framework contracts and volume guarantees, to encourage local manufacturers.”

According to the minister, the order mandates collaboration among the ministers of health, finance, as well as industry, trade and investment, to develop a harmonised implementation framework — expediting regulatory approvals and reducing bottlenecks.

Pate said 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) “will ensure swift implementation, with special waivers and exemptions effective for two years”.

“The implication of this order is pivot towards market-based incentives to encourage medical industrialization, reducing costs of medical products through import substitution over time, creating and retaining economic value and enabling job creation in the healthcare value chain,” the minister said.

Pate expressed appreciation to Tinubu for what he called “his courage and commitment towards ensuring Nigeria is put back on the path to prosperity.”

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