•Says cost of medicines to soar
By Chinyere Anyanwu
Fitch Solutions, a financial intelligence provider, has projected that the naira could depreciate to as low as N1,993 per dollar by 2028, a shift expected to significantly strain Nigeria’s pharmaceutical industry by raising the cost of importing essential medical devices. The prediction, experts noted, indicates that tougher times are on the horizon for Nigerians, especially the poor and vulnerable class and calls for urgent fiscal and monetary retooling to strengthen the naira and ultimately bolster the economy.
In a recent report, the company’s subsidiary, BMI Research, noted that despite an anticipated economic rebound, Nigeria’s medical devices market is likely to encounter ongoing challenges in both operations and demand in the near term.
“Nigeria’s medical device market will grow at a 2023-2028 compound annual growth rate (CAGR) of 10.8% in local currency terms and 9.6% in US dollar terms, taking market value to NGN171.1bn (USD344.7mn) by 2028,” the report said.
“We do believe that improving health spending through a focus on universal health coverage coupled with large population size and double burden of chronic and communicable diseases will sustain high demand for all medical devices, particularly diagnostics, consumables and hospital equipment over the near to medium term.
“For instance, in 2022, the country signed the National Health Insurance Authority Bill into law, making health insurance mandatory for citizens and legal residents.”
Listing Sanofi and GlaxoSmithKline as firms that left the country due to the naira devaluation, the report said the continued weakness of the currency would increase medical device import costs and erode consumer purchasing power.
According to the Fitch’s subsidiary, several challenges remain for local manufacturing of medical devices to take off in Nigeria, despite government incentives.
“Similar to other markets in sub-Sahara Africa, Nigeria heavily relies on medical device imports, with reliance of over 95%. We expect that the naira will end 2028 at NGN1993/USD from NGN306/USD in 2018.
“As the naira weakens, the cost of importing medical devices will continually increase, eroding both the health system and patient purchasing power especially to invest in essential medical technologies given underfunding of the public health sector. “This would particularly affect high-cost demand for devices such as diagnostics, orthopaedics and dental products.
“On the export front, a weaker naira will enhance the competitiveness of locally manufactured medical devices, fostering growth in the sector.