In an insightful interview with Felix Oloyede, Patrick Ajah, the Chief Executive Officer of May & Baker Nigeria Plc, reflects on the company’s eight-decade journey while discussing the broader context of the pharmaceutical industry in Nigeria. Ajah describes the past 80 years as both challenging and rewarding, attributing much of May & Baker’s success to the multinational experience gained during its early years as a subsidiary. The technological and operational knowledge acquired from foreign partners has enabled the company to navigate numerous market dynamics, despite the departure of several multinationals which has created both opportunities and challenges. May & Baker has demonstrated resilience through innovation and adaptation, allowing it to maintain its operational capabilities during difficult economic times.
Patrick Ajah elaborates on the difficulties that local pharmaceutical companies face in the current economic climate, especially regarding foreign exchange (forex) challenges. He cites the dependency on parallel markets due to constrained banking resources for funding imports of raw materials as a significant hurdle. This economic strain is evident in the billion-naira losses incurred by May & Baker due to forex issues, revealing that price adjustments in drugs are not solely based on production costs but heavily influenced by the fluctuating forex rates. Ajah expresses concern that many multinational companies are struggling and leaving Nigeria due to such economic pressures, thus exacerbating the overall challenges faced by the local manufacturing sector.
Despite these challenges, Ajah is hopeful that tax waivers for pharmaceutical materials promised by the Federal Government will soon materialize and positively impact production costs. However, he remains cautious about the actual implementation and its capacity to significantly reduce drug prices given the overarching influence of forex. Ajah acknowledges that the pharmaceutical sector is growing steadily, with May & Baker achieving an impressive year-on-year growth of over 20%. This growth, however, contrasts sharply with the stagnation or decline seen in multinationals leaving the Nigerian market, further highlighting the differing effects of economic policies on local versus foreign enterprises.
On the topic of local manufacturing and the potential for backward integration, Ajah notes that efforts are underway to produce Active Pharmaceutical Ingredients (APIs) domestically. Although this transition is gradual and capital-intensive, initiatives such as producing herbal products from locally sourced ingredients show promising early results. However, the process is hindered by limited research and development capabilities, which depend heavily on technology transfer and financial support. With many multinationals vacating the market, indigenous firms like May & Baker are stepping up by expanding production capabilities and investing in new factories, although transforming the market will take time and resources.
The exodus of multinationals presents both an opportunity and a warning for local manufacturers. Ajah is cautious about labeling the situation a “blessing in disguise,” emphasizing the need serious consideration of the factors leading to such departures. If the underlying issues—particularly economic and regulatory challenges—are not addressed, local firms might find it difficult to fill the gaps left behind. Ajah advocates for a strategic governmental approach to ensure that local capacity is developed effectively, thus converting potential challenges into opportunities for growth in the pharmaceutical sector.
Looking ahead, Ajah paints an ambitious vision for May & Baker over the next decade, prioritizing expansion beyond Nigeria. The company aims to explore partnerships in West Africa, bolster its product lineup, and ultimately become a cornerstone in the biovaccine sector. Ajah is determined to pioneer domestic API production, intending to create a foundation for future growth. However, he raises concerns over the impact of the “Japa syndrome,” where skilled personnel are leaving Nigeria in search of better opportunities abroad, significantly challenging human resource development within the industry. Ajah warns that losing the country’s talent can derail progress, making it imperative for stakeholders to address both the retention of skilled labor and the creation of an environment conducive to local and foreign investment in Nigeria’s pharmaceutical sector.
