By Crusoe Osagie

The Former Governor of Central Bank of Nigeria (CBN), Prof. Charles Soludo, has warned the managers of the Nigerian economy to prepare for stiff economic times.

Chukwuma Soludo

Chukwuma Soludo

Soludo gave the charge during the 14th Annual Conference of the Nigerian Association of Industrial Pharmacists (NAIP) explained that there were grave uncertainties and risks, with threats of another global recession.

He explained that according to the World Bank and the International Monetary Fund (IMF), the world’s economy is entering a dangerous phase with a darkening outlook.

“This is only a probability not that it is inevitable but they are only saying that if the world fails to do something now, we will probably end up that way. I just hope that the major industrial countries of the world especially the G20 will hasten up coordinate their resources to make sure that the world does not go into another recession. It will be a terrible thing if the world gets into that again.

According to him, Nigeria is not an island, stressing that if the world goes into recession it would definitely affect oil prices. “If oil prices come down, the economy comes down. It just tells us that we have to be prepared and strategise for alternative responses, should it happen,” he stressed.

“We are also in a world in which the old order is fast disintegrating, and there is a rapid structural rebalancing of economic power away from the Euro-American beltway to the Asia-Pacific and emerging markets,” he said.

He said the rebalancing of economic power would inevitably entail a rebalancing of geo-political and perhaps even military power.
“I see a world economy in the near future with three dominant reserve currencies (US$, Euro and Chinese Yuan/Renminbi) with all the instabilities it would entail and a world economy with increasing turbulence where only those who are constantly ahead of the curve will continue to prosper,” he added.

He noted that the global pharmaceutical industry is an oligopolistic $900 billion market, consolidated mainly in the US, Europe and with the Asia-Pacific as the new frontiers and dominated by 15 global conglomerates.

He pointed out that Nigeria has neither a comparative nor a competitive advantage in pharmaceuticals, nbso saying that to deliberately create a competitive advantage for the industry would require serious strategising and efforts. He stated that on cost considerations, Nigerian firms cannot compete

In his words, “The risk-adjusted rate of return on investment in the industry is comparatively very low. It is not surprising that the global majors in the industry are not pouring in capital.”

He said the pharmaceutical sector estimated at about $1, which is less than 0.5 per cent of the country’s Gross Domestic Product (GDP), represents the size of a medium-sized pharmaceutical company abroad and said that the share of Nigeria’s pharmaceutical industry in the global industry was basically zero.

“Local manufacturers have been consistently losing market shares in the local market, let alone being competitive in the international market. I understand that to date, none of the pharmaceutical companies in Nigeria is WHO-certified,” he said.

He said the fate of the pharmaceutical industry was tied to the Nigeria paradox: a rich country with poor firms and poor people. He added that the global economy was decoupling and recoupling in a manner no one foresaw a decade ago, nor does anyone know exactly what the future portends.

“Two things are however certain: only the rugged and dynamically self-regenerating economies will continue to emerge winners and the future belongs to societies with cutting edge labour skills and technology. Nigeria has all the potentials to be great, but its self-inflicted chains hold it down,” he said.

“If you adjust for the outsourced production to foreign firms, the 100 or so largely small and fragmented companies in the industry account for about 20 per cent of domestic drug consumption. It is a struggling industry,” he added.

He said Nigeria, one of the world’s fastest growing populations, evidently has a potential huge domestic demand that can support a vibrant pharmaceutical industry.

“Translating potentials into reality is yet another matter. With pervasive poverty and extreme inequality, only a small percentage of the population can afford quality health care and quality drugs,” he said.

Also speaking at the event, the National Chairman, NAIP, Mr. Lolu Ojo, said the association was not satisfied with its current position and had at various fora highlighted the need for the Federal Government to pay attention to the development and growth of the pharmaceutical sector.

“We are determined to continue to press for this attention until our goals are achieved. This conference, with the theme: Improving the pharmaceutical sector as a catalyst for national development is part of the efforts exerted in this direction,” he said.

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