Fitch Solutions projects a significant depreciation of the naira, predicting it will reach N1,993 per dollar by 2028. This decline is expected to pose challenges for Nigeria’s pharmaceutical sector, particularly in the importation of medical devices.
The forecast comes from BMI Research, a subsidiary of Fitch Solutions, which recently published its findings on the impact of currency fluctuations on the medical devices market.
According to the report, despite an anticipated economic rebound, Nigeria’s medical device market will continue to encounter operational and demand challenges in the near term. The market is expected to grow at a compound annual growth rate (CAGR) of 10.8% in local currency and 9.6% in US dollar terms between 2023 and 2028, reaching a market value of NGN171.1 billion (approximately USD344.7 million) by the end of the forecast period.
BMI Research highlights that Nigeria remains heavily dependent on imports for over 95% of its medical devices, similar to other markets in sub-Saharan Africa. The weakening naira will likely increase import costs, exacerbating pressures on the healthcare system and reducing consumers’ purchasing power for essential medical technologies, especially given the existing underfunding of the public health sector.
The report emphasizes that the depreciating currency could significantly affect the demand for high-cost medical devices, including diagnostics, orthopaedic, and dental products. However, on a positive note, a weaker naira may boost the competitiveness of locally manufactured medical devices, potentially supporting growth in the export market.
The analysis underscores persistent challenges in establishing a robust local manufacturing base for medical devices in Nigeria, despite government incentives aimed at promoting self-reliance in the sector. Fitch Solutions calls for strategic interventions to mitigate the adverse effects of the exchange rate volatility on the healthcare industry and ensure access to critical medical technologies.
