Fitch Solutions, a financial intelligence service provider, predicts that the naira will fall to N1,993 per US dollar by 2028. According to a report by the company’s subsidiary, BMI Research, despite an expected economic rebound, Nigeria’s medical devices industry would continue to encounter operational and demand difficulties in the near future.
“Nigeria’s medicaldevice market will grow at a 2023-2028 compound annual growthrate (CAGR) of 10.8% in localcurrency terms and 9.6% in USdollar terms, taking market value to N171.1billion (USD344.7million) by 2028,” the study projected.
It added, “We believe that improving health spending through a focus on universal health coverage, combined with a large population size and a double burden of chronic and communicable diseases, will sustain high demand for all medical devices, particularly diagnostics, consumables, and hospital equipment, in 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.”
According to the study, Sanofi and GlaxoSmithKline have departed the country as a result of the naira devaluation, and the currency’s continuing weakness will raise medical device import costs and diminish consumer purchasing power.
According to Fitch’s subsidiary, despite government incentives, indigenous medical device manufacture in Nigeria faces various hurdles. “Nigeria, like other sub-Saharan African markets, is heavily reliant on medical equipment imports, accounting for more than 95% of the total. We estimate the naira to conclude 2028 at N1993/USD, up from N306/USD in 2018.
“As the naira weakens, the cost of importing medical devices will rise, degrading both the health system and patient purchasing power, particularly the ability to invest in vital medical technologies due to underfunding in the public health sector.
“This would have a particular impact on high-cost demand for devices such as diagnostics, orthopaedics, and dental products.”
“On the export front, a weaker naira will increase the competitiveness of locally manufactured medical products, promoting industry growth.
“For example, in June 2024, President Bola Ahmed Tinubu signed an executive order to reduce medical service costs in the face of high inflation.”
“This directive reduces tariffs, excise charges, and VAT on particular machinery, equipment, and raw materials in an effort to reduce local production costs and increase competitiveness.
“The order targets healthcare products including pharmaceuticals, diagnostics, medical devices, biologicals and medical textiles.”
