Isaac Osei, Board Chairman of Intravenous Infusion Limited (IIL), a manufacturer of pharmaceutical products, has appealed to government to consider using bonds or other financial instruments to settle the National Health Insurance Scheme’s (NHIS) arrears to pharmaceutical suppliers.
According to Mr. Osei, the Ghana Chamber of Pharmacy and Pharmaceutical Manufacturers Association of Ghana (PMAG), have come to a common agreement on the idea and are in negotiations with government in order for government to use bonds or securities to settle receivables.
“The negotiations are still going on, if you are given a bond it means that you are giving government paper which enables you to either discount it now and collect cash from a financial institution or wait and collect it at the end of the turner of the bond.
Another point is that we all know what the inflation rate is now in the country, therefore it is always better to get cash now than tomorrow. So, if you have a financial instrument in the form of a bond, you can always trade it and get some cash to operate your business,” he said.
However, he indicated that PMAG is yet to receive an official response from government which will elaborate the structure which the bond will operate within. “But whatever it is, if you have that paper you can access cash, maybe at a discount,” he reiterated.
The Board Chairman, made this statement while speaking at the 4th Annual General Meeting (AGM) of Intravenous Infusion Limited, which came off in Accra.
Mr. Osei noted that the company, under the Government of Ghana’s stimulus package secured a medium term loan facility of US$3.2 million from Ecobank Ghana Ltd for the procurement of equipment and for the physical expansion of the factory to house some new equipment.
The Board of IIL stated that in spite of an increase in domestic competition at the local tender level, management were able to leverage on the brand and customer loyalty to drive revenue growth, leading to the accomplishment of a revenue increment of 14.2 percent year on year.
Acting Managing Director, Moukhtar M. Soalihu, indicated that the cost of sales is rising as the world supply chain is affecting global prices of raw materials and secondly, the COVID-19 pandemic has slowed down sales as the hospitals record reduction in OPD attendance and the postponement of elective surgeries.
Mr. Soalihu, also emphasised that in order to tackle the challenges efficiently and sustain revenue growth for shareholders, management has put in place mitigating measure which include plans to develop new products onto the market, expansion of plant size to increase production and entry into new markets specifically Ivory Coast and Burkina Faso.
The board briefed shareholders that the company has realised a 10 percent profit before tax margin though selling price across all products lines declined by 16.7 percent during the year under the review due to a downward review of essential medicines on the NHIA scheme by setting a ceiling.
“The Board of Directors are highly committed to shareholder value creation and will pursue policies to ensure the generation of adequate returns to shareholders. Once again, I have the pleasure to recommend a dividend of GH¢0.0044 per ordinary share for the financial year 2019,” the Board Chairman said.