Summary
Nigeria's position as the dominant economy in western Africa, and its high disease burden, will ensure it remains an important pharmaceutical market and gateway to surrounding countries. Despite its position as Africa's most populous nation, drug consumption among the 140mn population is low - a factor that contributes to making the Nigerian pharmaceutical market one of the smallest that BMI monitors in the Middle East and Africa (MEA) region. The potential for growth in the market is tempered by a serious lack of healthcare funding, discriminatory policies against imports and a patchy intellectual property (IP) regime.
Nigeria is once again placed 13th out of the 14 MEA region countries that make up BMI's adjusted Business Environment rankings, ahead of only Zimbabwe. Nigeria's continued poor showing reflects the low drug expenditure and import regulations that are weighted in favour of domestic producers. The most important factor that will hold back market growth over the medium-term is the absence of a coherent or adequate regulatory regime, deterring foreign investors. The market is currently worth US$218mn. BMI expects slow growth over the next five years, with the market reaching only US$270mn in 2011. Expenditure per capita is expected to remain very low at US$2.
Recently, the National Agency for Food and Drug Administration and Control (NAFDAC) has made a concerted effort to clamp down on rampant counterfeiting with some success. These moves have helped to reduce the authority's corrupt reputation, although it remains to be seen whether the government as a whole is able to shake off this billing.
In terms of the domestic sector, the Nigerian pharmaceutical industry continues to perform below capacity, hampered by a lack of investment and poor infrastructure. The government is committed to making the domestic sector self-sufficient, yet the general picture remains that local producers do not have the technical capability to meet demand for complex drugs. Demand for HIV/AIDS treatment and malaria drugs will remain substantial, with low-cost generic manufacturers in the emerging Asian markets best placed to take advantage.
The government claims that its National Health Insurance Scheme (NHIS) is on target to provide the President's target of universal health coverage by 2015. However, big questions remain over who will meet the cost of the scheme as it is rolled out to include the informally employed and unemployed sections of the population.
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