Sick and stranded: Presidential order fails to curb soaring drug prices
Despite President Bola Tinubu’s executive order in June 2024 aimed at reducing drug costs by abolishing tariffs, excise duties, and Value Added Tax on pharmaceutical machinery and raw materials, Nigeria continues to battle soaring medication prices.
The intended policy, designed to ease the financial burden on patients, remains largely unenforced, leading to no relief for consumers or manufacturers.
The Coordinating Minister of Health and Social Welfare, Muhammad Pate, on June 28, 2024, announced on X that President Bola Tinubu signed an Executive Order aiming to increase local production of healthcare products
Pate noted that 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.
“Specified items include Active Pharmaceutical Ingredients, excipients, other essential raw materials required for manufacturing of crucial health products like drugs, syringes and needles, Long-lasting Insecticidal Nets 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.
“The Order mandates collaboration between the Ministers of Health, Finance and Industry, Trade and Investment to develop a Harmonised Implementation Framework, expediting regulatory approvals and reducing bottlenecks,” Pate wrote.
The minister noted that agencies, including the Nigeria Customs Service, the National Agency for Food and Drug Administration and Control, Standards Organisation of Nigeria, and the Federal Inland Revenue Service, would ensure swift implementation, with special waivers and exemptions effective for two years.
A release issued by the Nigeria Customs Service on March 26, 2025, stated that the agency had commenced the implementation of the executive order.
The release, signed by the National Public Relations Officer of the Service, Abdullahi Maiwada, noted,” Drawing from Presidential directives aimed at enhancing local manufacturing of healthcare products, reducing the costs of medical equipment and consumables, as well as stimulating local investments, the Nigeria Customs Service (NCS) is pleased to announce that His Excellency, President Bola Ahmed Tinubu GCFR, through the Honourable Minister of Finance and Coordinating Minister of the Economy, Olawale Edun, has approved the comprehensive guidelines to actualise these objectives.
Consequently, critical raw materials essential for the production of pharmaceutical products will be exempted from import duty and Value Added Tax (VAT) for a period of two years. This exemption covers Active Pharmaceutical Ingredients (APIs), excipients, and other vital raw materials required for manufacturing essential medicines, Long-Lasting Insecticidal Nets (LLINs), Rapid Diagnostic Kits, reagents, and packaging materials.
“To ensure that these fiscal incentives are fully utilised, eligibility is limited to manufacturers of pharmaceutical products recognised by the Federal Ministry of Health and Social Welfare, provided they possess a valid Tax Identification Number (TIN). This measure ensures that the benefits directly support legitimate manufacturers committed to strengthening Nigeria’s healthcare infrastructure.”
