FG grants drug manufacturers N24bn tax waivers to boost local production

Coordinating Minister of Health and Social Welfare Muhammad Pate has announced that the Nigerian government has granted ₦24 billion in tax waivers to pharmaceutical manufacturers between 2025 and 2026 to expand local production of medicines and reduce reliance on imports.

Speaking at the 2026 Nigeria Health Sector Joint Annual Review in Abuja, Pate said the waivers were part of incentives introduced under a presidential executive order signed in 2024 to support domestic production of medicines, medical equipment and other essential healthcare products.

“We have 12 technology-transfer agreements and a prospective investment pipeline exceeding $5 billion,” he said. Pate said the government’s priority was to turn those prospective investments into operating factories and businesses.

“Our task is to help those prospective investments become operating businesses that supply safe, effective and affordable products and create opportunities for Nigerians,” he said.

The minister said 10 factories or manufacturing lines had been commissioned under the government’s healthcare industrialisation programme, including six in 2026. The facilities produce medicines, rapid diagnostic tests, long-lasting insecticidal nets and medical oxygen. He credited the Presidential Initiative for Unlocking the Healthcare Value Chain (PVAC), coordinated by Abdu Mukhtar, with supporting the expansion.

Minister of State for Health and Social Welfare Iziaq Salako said locally manufactured medicines accounted for 50 per cent of Nigeria’s pharmaceutical market in 2026, up from 30 per cent in 2023. He said figures from the Pharmaceutical Group of the Manufacturers Association of Nigeria and the National Agency for Food and Drug Administration and Control (NAFDAC) also showed an increase of about 10 per cent in the number of active local pharmaceutical companies.

Pate said NAFDAC was tightening controls against falsified medicines. He also said the government was working to get Medipool, a group purchasing organisation, up and running. The initiative is designed to pool government demand for medicines and other healthcare supplies while allowing existing supply channels to continue operating. The government expects pooled purchasing to make demand more predictable for local manufacturers.

President Bola Tinubu signed the executive order in July 2024, granting relief from tariffs, excise duties and value added tax on specified pharmaceutical machinery, equipment and raw materials. The presidency has described the order as a major health sector reform aimed at attracting investment, making local manufacturers more competitive and lowering the cost of pharmaceutical products.

At the eighth Nigeria Pharma Manufacturers Expo in Lagos in September 2026, Salako said the government was targeting at least 70 per cent local production of essential healthcare products by 2030. He said 87 manufacturers were benefiting from zero tariffs on pharmaceutical machinery, active pharmaceutical ingredients and other production materials.

Salako also said PVAC had secured about $2 billion in financing commitments at single-digit interest rates, with around 50 Nigerian healthcare companies in advanced discussions for funding. He said greater domestic production would help protect Nigeria’s medicine supply from disruptions in international supply chains.

Salako said Nigeria needed to expand beyond finished medicines into the production of active pharmaceutical ingredients, vaccines, diagnostic tests and other essential supplies. He identified research, innovation, regulatory cooperation and access to regional markets as priorities. Further expansion will depend on sustained investment, access to financing and manufacturers’ ability to meet quality standards.

The annual review, held under the theme “Make the Data Count”, brings together federal and state officials, development partners and other stakeholders to assess progress under the Nigeria Health Sector Renewal Investment Initiative. The initiative uses a sector-wide approach to improve coordination, financing and accountability in healthcare delivery.