The Managing Director and Chief Executive Officer of May & Baker Nigeria Plc, Pharm. Patrick Ajah, has said the company’s monthly spending on energy to power its factory has risen from about N65 million before 2023 to between N160 million and N175 million, highlighting the rising cost of manufacturing in Nigeria.
Ajah, said the increase of between N95 million and N110 million represented a rise of approximately 146 per cent to 169 per cent in the company’s monthly energy expenditure.
He spoke in his office in Lagos during the presentation of the 2026 Excellence in Leadership Award plaque to him by the Akinjide Adeosun Foundation (AAF).
“One example that I just mentioned is power. Before 2023, our spending on power monthly was about N65 million. Now, we are spending between N160 million and N175 million.
“Just for the factory, we don’t use public power; we use gas, and it is denominated in dollars. So, how many companies can afford to do that?” he asked.
He said the rising cost of energy had become one of the major threats to local pharmaceutical manufacturing, warning that companies could not continue to operate and expand if the cost of doing business remained high.
According to him, the sector is also burdened by poor infrastructure, which has forced manufacturers to provide many services and facilities that should ordinarily be provided through public infrastructure.
Ajah warned that continued factory closures would undermine Nigeria’s industrial growth and called for stronger government policies to support local manufacturers.
“If companies keep collapsing, then we’re not going anywhere,” he said.
He urged the government to create a more enabling business environment through improved infrastructure, stable and affordable energy, security and policies that would encourage local and foreign investment.
The May & Baker boss also said foreign exchange volatility had created significant challenges for pharmaceutical manufacturers, particularly those dependent on imported raw materials, equipment and other production inputs.
He said the situation became particularly difficult between 2023 and 2025, when the company’s management spent a substantial part of its time sourcing foreign exchange and managing exchange-rate risks.
According to him, the major challenge was not only the high cost of foreign exchange but also the frequent fluctuations, which made it difficult for manufacturers to plan production and determine the prices of medicines.
“At some point, our job description changed. About 65 per cent of the time, we were looking for forex, trying to manage it,” he said.
Ajah said relative stability in the foreign exchange market had made planning easier for the company, even though the exchange rate remained high.
He said the improvement had helped May & Baker avoid increasing the prices of its products so far this year, a development he said was important because frequent price increases would ultimately affect patients and other consumers.
Ajah also called for the restoration of intervention funds for pharmaceutical manufacturers, warning that companies could not sustainably borrow from commercial banks at interest rates of about 33 per cent to finance long-term investments.
He said the CBN’s COVID-19 intervention fund had been useful to pharmaceutical companies because it provided single-digit financing for expansion, machinery and other capital projects.
Ajah said May & Baker used part of the facility to establish a hub for the development and packaging of products derived from Nigerian natural sources.
He said the investment enabled the company to commercialise a locally developed sickle cell product, with almost all its inputs sourced locally except the capsule shell.
The company also developed and introduced a bitter leaf capsule following research by a Nigerian professor, he added.
He said such investments would have been difficult to undertake with commercial loans because pharmaceutical manufacturing often requires years before a company begins to recover its investment.
“There is no company like ours who would borrow money at 33 per cent and invest in a factory. No company would do it because it would take you at least five years before you start breaking even.
“Our gross margin is in the range of 35 per cent to 40 per cent for most products. So, if you go and borrow money at 33 per cent, how do you survive?” he said.
Ajah urged the CBN and the Bank of Industry to reconsider targeted funding and other incentives for the pharmaceutical sector to encourage local production.
The May & Baker chief also identified the migration of pharmacists and other skilled professionals as another growing challenge for the industry.
He said many qualified pharmacists were leaving the country, making it increasingly difficult for pharmaceutical companies to recruit and retain skilled personnel.
Ajah said May & Baker was responding by opening its facilities to pharmacy students and interns to expose them to career opportunities in the local pharmaceutical industry.
The company, he said, was also exploring better remuneration and other incentives to retain skilled professionals.
Despite the challenges, Ajah said local pharmaceutical manufacturing was making progress and helping to reduce Nigeria’s dependence on imported medicines.
He said Nigeria now had nearly 200 local pharmaceutical manufacturers and that local production had risen from about 30 per cent in previous years to more than 40 per cent.
He said government policies, including duty waivers for some locally produced pharmaceutical products, had provided some relief, although he maintained that more support was needed.
Ajah said local production would make essential medicines more affordable and accessible, particularly antibiotics, antimalarials, antidiabetics and other products used regularly by Nigerians.
He also said a stronger local manufacturing base would improve the fight against counterfeit medicines.
According to him, locally based manufacturers have sales representatives and personnel across the country who can more easily identify and report suspected fake versions of their products.
“If somebody fakes our products, most of the pharmacies where these products are going to get into know our people. Most of the time, when there is a challenge, they are the ones who call us.
“But if the company is outside the country and its product is faked, it is difficult for them to know, especially now that many multinationals are not in the country,” he said.
Ajah said the efforts of the National Agency for Food and Drug Administration and Control (NAFDAC) had also helped to tackle counterfeit medicines, but added that Nigeria’s size made effective monitoring difficult.
He said increasing the number and capacity of local pharmaceutical manufacturers would make it easier to detect and respond to fake medicines across the country.
Ajah said May & Baker had performed strongly over the past year, attracting interest from foreign companies seeking investment and partnership opportunities.
He said more than 10 companies from outside Nigeria, including firms from Europe and the United States, had approached the company to explore possible partnerships.
According to him, the company had quadrupled its revenue over the past five years and was targeting another major expansion over the next three years.
However, he warned that Nigeria could lose investment opportunities if insecurity and infrastructure challenges were not addressed.
Ajah said some parts of the country had become unsafe for company representatives to visit, while investors were increasingly concerned about security, power and the cost of operating in Nigeria.
He said Nigeria remained attractive to investors because of its large market and the opportunities created by the exit of several multinational companies, but stressed that the government must create the conditions needed for businesses to thrive.
Ajah said sustained investment in infrastructure, security and affordable financing would be critical to helping local manufacturers fill the gaps left by exiting multinational companies and build a stronger pharmaceutical industry.