Foreign currency shortages hard hit pharmaceutical industry

by Sunday News Online | Sunday, Sep 10, 2017 | 731 views

foreign currency

Dumisani Nsingo, Senior Business Reporter
THE pharmaceutical industry is struggling to import critical medication due to the crippling payments gridlock in the financial services sector, a development which is likely to impact negatively to the country’s health sector.

Pharmaceutical Society of Zimbabwe president Mr Sikhumbuzo Mpofu said the prevailing foreign currency shortage was impacting negatively on the importation of critical medicines and ingredients used for manufacturing various drugs as well as packaging material.

“The country is indeed facing a number of economic challenges which has in recent times manifested in the form of critical foreign currency shortages.

Like any other sector the pharmaceutical industry has been hard hit, maybe the impact has been more in the health delivery sector, and more specifically the pharmaceutical industry.

“Some medicines are not locally manufactured and have to be imported. Some are so critical like insulins to an extent that the negative effect is felt immediately while for others the impact is still there but is gradual. For those medicines that are locally produced, the pharmaceutical active ingredients and all the other components needed to make medicines have to be imported including packaging material,” Mr Mpofu.

He said failure by local banks to expedite payment to foreign suppliers has resulted in local firms losing credibility in South Africa and beyond with suppliers cutting on deliveries and reducing credit limits.

“On the issue of availability of medicines, we are in a serious situation. The industry has not seen any allocation for the last two weeks from the banks and we are now on hold with practically all our suppliers, in some instance orders are being cancelled. Service provision is affected, look at the radiotherapy centre in Mpilo — the hospital is failing to timely access the forex to purchase the radio pharmaceuticals needed for the smooth operation of the centre,” said Mr Mpofu.

Zimbabwe relies on imports as the country’s manufacturing sector is not producing much due to lack of working capital, high production costs, low capacity utilisation levels as well as obsolete equipment. Since 2009, Zimbabwe has imported products worth over $20 billion.

“The business has obviously been affected, right across the industry from manufacturers, to wholesalers of medicines and community pharmacies.

When there are shortages the first response is panic on the consumers of medicines due to uncertainties. There is then the emergence of real shortages both in public and private sectors.

“With these (shortages) survival modes are activated and you may see the emergence of parallel importations by unlicensed players and black market as well, which puts lives of our people in danger. Medicines are poison if not handled and stored properly and they are only safe in qualified personnel hands like pharmacists and only being distributed from licensed premises,” said Mr Mpofu.

He said there was need for the Reserve Bank of Zimbabwe to prioritise the health sector in its allocation of foreign currency for imports.

“As a sector we have made representations to the RBZ who have put the industry in high priority. The RBZ should reserve for the sector a weekly allocation — like they do for fuel and electricity . . . ,” said Mr Mpofu.

He said the designation of Special Economic Zones (SEZ) would go a long way towards reviving the country’s manufacturing sector.

“The promulgation of the enabling legislation and appointment of the SEZ board is a major development in stimulating the manufacturing industry in Zimbabwe. The incentives that come with this status will stimulate industrial growth of the pharmaceutical manufacturing industry,” said Mr Mpofu.
@DNsingo

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