Nigeria’s extreme reliance on pharmaceutical imports to meet local demand will continue this year, Fitch Solutions notes.

Like most countries across the continent, Nigeria’s pharmaceutical market is extremely reliant on imports, with its main import partners including China and the US. Particularly, these imports are huge among products whose manufacturing require technologies that cannot be obtained locally as well as lack of expertise.

According to Fitch Solutions, imports will remain key to meeting growing local demand for medicines. Pharmaceutical imports, which reached a value of US$1.56 billion, representing NGN562.4 billion are likely to hit a compound annual growth rate (CGAR) of 20.0% and 12.9% in local currency and US dollar terms respectively.

Despite the government’s efforts to make Nigeria’s pharmaceutical market self-sufficient, it still suffers limited local drug production. The hindrance that plague pharmaceutical exports include the lack of good manufacturing practice certification. Fitch Solutions holds the view that, if these practice certifications are approved across more local firms, it would expose Nigeria to more local trade partners.

In addition, the country is limited by unreliable energy supplies and a perception that Nigerian pharmaceuticals produce counterfeit drugs in West Africa, thus, further restricting exports. Nonetheless, the key to attracting multinational investment would be a radical improvement of the national infrastructure, Fitch Solutions proposes.

Fitch Solutions further indicates that the Nigerian government can move to establish a zone where manufacturing could be concentrated as is seen in Ghana. This, it believes can help solve the problems alluded to.

Based on Fitch Solutions forecasts, pharmaceutical exports reached a value of NGN127.9 million (US$0.36mn) in 2020, and are expected to experience a five-year CAGR of -2.6% and -8.3% in local currency and US dollar terms respectively, to reach NGN112.3mn (US$0.23mn) by 2025.

Nigeria’s pharmaceutical market to face downside risks

These notwithstanding, Nigeria’s pharmaceutical market may face downside risks due to the current travel ban on flights from India, Fitch Solutions notes.

“As Nigeria relies on India as one of its key pharmaceuticals exporters, depending on the duration of the ban, there may be implications for the pharmaceutical industry in Nigeria.

“One major risk from the ban is that it could lead to drug scarcity and eventual hiking of prices of pharmaceutical products. The travel ban could also lead to a surge in falsified, substandard and counterfeit medicines.”

It is estimated that approximately 3 million unregistered pharmaceutical pharmacies and warehouses operate in the country. This poses a structural threat and will remain so, if the regulatory body does not move to tackle it. Despite these issues, the regulatory body for all pharmacists and medicine dealers in the country, the Pharmacy Council of Nigeria (PCN) has warned that such activities threaten health and national security.

Fitch Solutions notes that to ensure standards are maintained, the council has stepped up efforts. In early May 2021, a PCN enforcement team was sent to Sokoto state with the aim of ensuring that all premises where medicines are sold are registered, fulfil conditions with respect to location, storage facilities, environment, documentation and personnel.

The PCN Registrar said that at the end of the enforcement exercise, which lasted a week, a total of 536 premises comprising of 90 pharmacies and 446 patent medicine shops were visited. Of these, a total of 299 premises made up of 37 pharmacies and 262 patent medicine shops were sealed for various offences.

Fitch Solutions indicates that without regular enforcement exercises like these by the PCN team, Nigeria’s pharmaceutical market will continue to be infiltrated by a large number of counterfeit medicines.