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HomeCompany NewsNigeria's drugmaker Fidson says dollar shortage raising costs of production

Nigeria’s drugmaker Fidson says dollar shortage raising costs of production

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Nigeria’s drugmaker, Fidson Healthcare Plc said a long-running national dollar shortage is driving up the cost of raw materials the pharmaceutical industry relies on to produce medicine for Africa’s most populous country.

Fidson, which like other pharmaceutical companies imports almost all of its raw materials, is only able to access about 30 per cent of its foreign currency requirements from the Central Bank Nigeria (CBN), according to its finance chief.

The company must instead turn to commercial lenders and bureaux de change sources, which raises its average dollar costs to around N500, about 15 per cent than the official rate of about N436.

“It’s very tough,” said Fidson head of finance and accounts, Imokha Ayebae said in a virtual interview.

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The CBN adopted a strict demand management strategy to preserve foreign exchange reserves after a drop in oil exports that account for 80 per cent of export income.

While that has kept the naira largely stable compared to the currencies of other African countries, it has caused acute dollar shortages and increased the spread between the official and parallel market rates.

The local unit closed at N436.33 to a dollar at the official spot market on Friday, cheaper than the unauthorised market exchange rate of about N705.

Fidson, which produces cardiovascular, antiretroviral, anti-diabetic and infusion drugs incurred exchange losses of more than N2 billion last year, Ayebae said

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