Fitch Solutions has warned that Nigeria’s pharmaceutical industry will face severe challenges in the coming years as the naira is projected to depreciate significantly, potentially reaching N1,993 to the dollar by 2028.
This depreciation will particularly impact the country’s ability to import medical devices, further straining the health sector.
In a new report from its subsidiary BMI Research, Fitch predicted that despite an anticipated rebound in Nigeria’s economy, the medical device market will face persistent headwinds over the near term.
The market, which is heavily reliant on imports, is expected to grow at a compound annual growth rate (CAGR) of 10.8% in local currency terms and 9.6% in US dollar terms, reaching a market value of NGN171.1 billion (USD344.7 million) by 2028.
The report highlights that Nigeria’s growing population, coupled with a heavy burden of both chronic and communicable diseases, will sustain high demand for medical devices, particularly for diagnostics, consumables, and hospital equipment.
The country’s recent move to make health insurance mandatory, through the passage of the National Health Insurance Authority Bill in 2022, is also expected to drive health spending.
However, Fitch cautioned that the ongoing devaluation of the naira would continue to raise the cost of medical device imports, reducing consumer purchasing power and further burdening Nigeria’s public health sector, which already suffers from underfunding.
“Medical device import costs will rise as the naira weakens, eroding both the health system’s purchasing power and the ability of patients to access essential medical technologies,” the report stated. Devices with high costs, such as those for diagnostics, orthopaedics, and dental care, will be particularly affected.
The devaluation has already driven several global pharmaceutical firms, including Sanofi and GlaxoSmithKline, to exit the Nigerian market. As the naira’s value continues to slide, Fitch forecasts the currency to end 2028 at N1,993 to the dollar, compared with N306 to the dollar in 2018.
Despite the Nigerian government’s efforts to incentivise local production of medical devices, the report also noted that structural challenges—such as a lack of skilled labour, inadequate infrastructure, and regulatory hurdles—continue to hinder the development of a viable local manufacturing sector. Nigeria still imports over 95% of its medical devices.
In a bid to reduce local production costs, President Bola Ahmed Tinubu signed an executive order in June 2024 to eliminate tariffs, excise duties, and VAT on certain medical equipment and raw materials.
The move is designed to enhance the competitiveness of locally produced medical devices, but Fitch noted that the broader macroeconomic environment could limit its effectiveness.
Fitch also pointed to the operationalisation of the African Medicines Agency (AMA) as a potential long-term solution to improve the regulatory landscape for medical products in Africa. However, the firm stressed that this will only have a meaningful impact if the AMA is fully implemented and effective.
“The lack of reliable electricity, transportation infrastructure, and a substandard regulatory environment remain significant barriers to growth,” Fitch added.
Despite efforts to foster local production, Nigeria’s medical device industry faces significant challenges that will likely limit growth prospects over the coming years, according to the report.
