By Siaka MOMOH
The Centre for the Promotion of Private Enterprise [CPPE] has thumbs up for the Federal Government for unlocking fiscal policy measures on pharmaceuticals.
According to a recent statement signed by Muda Yusuf, the Centre’s CEO, it commends the recent Executive Order removing import duties , VAT, Excise duty on pharmaceutical raw materials, intermediate products, medical diagnostic equipment and machineries.
It states these fiscal policy measures would boost domestic production of pharmaceutical products, reduce the cost of medications, improve access to healthcare and impact positively on the well-being of citizens and that it would also revitalize our pharmaceutical industries and create more jobs.
CPPE argues “Fiscal policy measures have much better prospects of addressing supply side 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 realization of this objective.
“We recommend that these 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 incentivize 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”.
The Centre further argues: “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 incentivized to improve production and ensure sustainability investments in that space. The Nigeria economy cannot afford to submit to a regime of complete trade liberalization in the light of the challenges faced by domestic manufacturers. We need to stem the tide of deindustrialization 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 realization 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.”