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Industrialists Seek Tax Review on Pharm Products

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  • Industrialists Seek Tax Review on Pharm Products

Industrial pharmacists in the country have urged the Federal Government to review the current tax regime on pharmaceutical products. They said that the regime, which they blamed for the high cost of healthcare products, was overdue for a review to ease the suffering of most Nigerian.

Meanwhile, renowned economist, Opeyemi Agbaje, has said Nigeria can attain between two to four per cent of growth in 2017 with the policy documents that has always been the missing link.

The industrial pharmacists, under the aegis of National Association of Industrial Pharmacists (NAIP), at the 2017 Economic Outlook, held in Lagos, appealed for a zero tax regime on pharmaceutical products. They further suggested that imported pharmaceutical products should be categorized into four with different taxation.

Chairman of NAIP, Gbenga Falabi, for instance, said pharma products that entails high technological manufacturing skills, and products on patency should enjoy zero tax, while products local manufacturers can manage to build capacity to produce in few years ahead should have moderate tax of about 20 per cent .

Falabi noted that though the idea of the import adjustment tax is to prevent people from outsourcing their manufacturing materials abroad and rather look inwards, but Nigeria cannot manufacture certain pharmaceutical products in the next 20 to 50 years owing to lack of high technological requirement.

The NAIP chairman said 2016 was a lost year for the industry due to forex issues, “but 2017 we are very hopeful, we would ride the rough waters and am sure our captains are able to deliver us to the shore.”

Falabi regretted that the industry’s contribution to the country’s Gross Domestic Product (GDP) has been very insignificant at 0.22 per cent, “but we are determined, down the line in the next 15 years , the pharmaceutical sector would be at the forefront to affect government’s policies.”

Though we have eluded the fact we need to unite to come up with a common roadmap to fulfill our mission, Falabi noted, the right direction would be looked at soon.

Chief Executive Officer, RTC Advisory Services, Opeyemi Agbaje, said that Nigeria can attain between two to four per cent of growth in 2017 with compelling policy documents, which he says is the challenge.

Agbaje said if that minimum of two per cent is achieved by the end of 2017, the economy can aspire higher in 2018 to better the indices and recover from recession.

According to him, in spite of the high inflation which stands at 18.6 per cent, there are other positive economic indicators like the rise in oil prices, the growth of reserves and the increase in euro bond to a billion dollars point to the possibility of achieving the two per cent minimum growth by the end of the year.

Agbaje, who was optimistic on the improvement in the nation’s economic growth, noted that all the above indicators especially the rise in euro bond is evidence that the confidence is returning from the international market and more.

The RTC advisory boss, however, remarked that on the other hand, if the indices are not properly managed, the economy could get worse and encounter a meltdown.

He identified the disparity in the dollar exchange rate as the biggest problem with most business in country, “some people are getting it for N305 while for others is above N500. People cannot predict, hence, they cannot plan as well.”

Continuing, he said: “We need to urgently rethink the approach to FX policy management, as it is one of the critical parameters which would measure the policies that would be brought under the economic recovery plan, else dollar could even get high as N600 or more by the end of the year,” he added.

Agbaje advanced that though there is the desire to get out of recession, which he termed a minus, a stronger economic growth with a minimum of four per cent and even up to 10 per cent should be the target, so it can balance up population increase too. Agbaje further called for a change of the business models in the manufacturing sector with emphasis on the pharmaceutical industry.

He said the Nigerian pharmaceutical sector like most manufacturing industries has become unsustainable owing to the failure of the dominant business model practiced by most.

He, therefore, urged them to begin to look inward to source inputs despite the challenges, “businesses would become more sustainable if 60 to 70 per cent of inputs are sources locally,” he added.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Guinness Nigeria Postpones Spirits Importation Exit, Extends Deal with Diageo

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Guinness Nigeria Plc has announced a delay in its plan to halt the importation of spirits as it extended its agreement with multinational alcoholic beverage company Diageo until 2025.

The decision, communicated through a corporate notice filed with the Nigerian Exchange Limited on Tuesday, cited a longer-than-expected transition period for separating its business from Diageo’s.

Initially slated for discontinuation in April 2024, the importation of premium spirits like Johnnie Walker, Singleton, Baileys, and others under the 2016 sale and distribution agreement with Diageo will now continue for an additional year.

The extension comes as the process of business separation between Guinness Nigeria, a subsidiary of Diageo, and Diageo itself faces unexpected delays.

In October, Guinness Nigeria had announced plans to cease importing spirits from Diageo, a move aimed at reducing its foreign exchange requirements.

However, the separation process has encountered unforeseen hurdles, necessitating the extension of the importation agreement.

The notice, signed by the company’s Legal Director/Company Secretary, Abidemi Ademola, highlighted the ongoing efforts by Guinness Nigeria and Diageo to implement the separation, originally scheduled for completion by April 2024.

The extension underscores the complexity of disentangling the businesses and ensuring a smooth transition.

Guinness Nigeria reaffirmed its commitment to the long-term growth strategy, aligning with Diageo’s decision to establish a new, wholly-owned spirits-focused business.

Despite the delay, both companies remain dedicated to managing the importation and distribution of international premium spirits in West and Central Africa, with Nigeria as a key hub.

The postponement comes amid challenges faced by Guinness Nigeria, including significant exchange rate losses, which amounted to N49 billion in the 2023 half-year operations.

Despite these setbacks, the company remains optimistic about its future prospects in the Nigerian market.

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Private Sector Warns: Interest Rate Hike to Trigger Job Cuts and Inflation Surge

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As the Central Bank of Nigeria (CBN) announced a hike in the Monetary Policy Rate (MPR) from 22.75% to 24.75%, concerns have been raised by the private sector regarding the potential ramifications on job stability and inflationary pressures.

The move, aimed at curbing inflation and stabilizing the exchange rate, has prompted apprehension among business operators who fear adverse effects on the economy.

Representatives from the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and the Nigerian Association of Small Scale Industrialists have voiced their worries over the increased difficulty in accessing affordable credit.

They argue that the higher interest rates will impede the private sector’s ability to borrow funds for expansion and operational activities.

This, they fear, could lead to a reduction in business investments and subsequently result in widespread job cuts across various sectors.

The Lagos Chamber of Commerce and Industry (LCCI) acknowledged the necessity of the interest rate hike but emphasized the potential negative consequences it may bring.

While describing it as a “price businesses would have to pay,” the LCCI highlighted the current fragility of the economy, exacerbated by various policy missteps.

They cautioned that the increased cost of borrowing could stifle entrepreneurial activities and discourage expansion plans critical for economic growth and job creation.

Experts have echoed these concerns, warning that the tightening monetary conditions could exacerbate inflationary pressures and hinder economic recovery efforts.

With inflation already soaring at 31.70%, the rate hike could further fuel price hikes, especially in essential goods and services, thus eroding the purchasing power of consumers.

However, CBN Governor Yemi Cardoso defended the decision, citing the imperative to address current inflationary pressures and ensure sustained exchange rate stability.

He emphasized the need to restore the purchasing power of ordinary Nigerians and expressed confidence that the economy would stabilize by the end of the year.

Despite assurances from the CBN, stakeholders remain cautious, calling for a more nuanced approach that balances the need for price stability with the imperative of fostering economic growth and job creation.

As businesses brace for the impact of the interest rate hike, all eyes are on the evolving economic landscape and the measures taken to mitigate its effects on livelihoods and inflation.

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Breaking Barriers: Transcorp Hotels CEO Shares Journey from Crisis to Success

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Dupe Olusola

Dupe Olusola, the Managing Director/CEO of Transcorp Hotels Plc, reflects on her remarkable journey from navigating the depths of a global pandemic to achieving unprecedented success in the hospitality industry.

Appointed in March 2020, amidst the onset of the COVID-19 pandemic, Olusola found herself at the helm of a company grappling with the severe economic fallout and operational challenges inflicted by the crisis.

Faced with a drop in occupancy rates from 70% to a mere 5%, Olusola and her team were confronted with the daunting task of steering Transcorp Hotels through uncharted waters.

Undeterred by the adversity, they embarked on a journey of transformation, leveraging creativity and resilience to navigate the turbulent landscape.

Implementing innovative strategies such as introducing drive-through cinemas, setting up on-site COVID-19 testing facilities, and enhancing take-away services, Transcorp Hotels adapted to meet the evolving needs of its guests and ensure continuity amidst the crisis.

Embracing disruption as a catalyst for growth, Olusola fostered a culture of collaboration and teamwork, rallying her colleagues to overcome obstacles and embrace change.

Through unwavering determination and a commitment to excellence, Transcorp Hotels emerged from the pandemic stronger than ever, breaking profit and revenue records year after year.

“It’s indeed been a great opportunity to learn and relearn, to lead and to grow. When you see success stories, remember it’s a journey with twists, turns, ups and downs but in the end, it will all be okay”, she said.

Olusola’s leadership exemplifies the power of adaptability and perseverance, inspiring her team to transcend limitations and chart a course towards unprecedented success.

As Transcorp Hotels continues to flourish under her stewardship, Olusola remains steadfast in her dedication to driving innovation, fostering growth, and breaking barriers in the hospitality industry.

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